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Analysis

What is Cash Burn?

Cash Burn The rate at which a company expends its cash reserves, typically expressed as a monthly or quarterly amount, commonly used to assess sustainability of loss-making or high-growth firms.

Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework

How is “Cash Burn” Used in Practice?

Startups closely monitor cash burn to estimate how many months of operations remain before requiring additional funding.

Certification Exam Relevance

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Who Needs to Know This Term?

  • Financial Analysts
  • Bankers
  • Traders

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Frequently Asked Questions

What is Cash Burn?

The rate at which a company expends its cash reserves, typically expressed as a monthly or quarterly amount, commonly used to assess sustainability of loss-making or high-growth firms.

Where can I learn this term for free?

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