burn rate

Definition

For a company with negative cash flow, the rate of that negative cash flow, usually per month. Often used by venture capitalists to measure how much time a startup has to reach positive cash flow before they run out of money or require additional funding.

Use burn rate in a sentence

When the auditor examined the burn rate of the company, she quickly realized that the business was in financial trouble.

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I checked out the burn rate and noticed that we were not doing too good and we needed to shape up if we were going to be okay.

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When she checked on the financial health of her nail salon, she realized that the burn rate of their expenses each month was very high and she was having trouble sustaining the business.

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burn and churn out-of-cash date