Measures how quickly your business is spending money (net-negative cash flow)
If your Cash on Hand increases in a period your Net Cash Burn is negative (because you generate money)
Include | Don’t include |
Cash inflows (e.g. revenues) and cash outflows (e.g. costs) | Unusual positive cash flows such as received investments |
Calculation
CoH at beginning of period
- CoH at beginning of period
______________________
= Net Cash Burn
A company has started a month with 52.000 € COH at the end of the month it has 48.000 € left. Their Net Cash Burn is therefore calculated as follows:
+52.000€
-48.000€
________
=4.000€
Alias | Net Burn/Net Burn Rate/Cash Burn Rate |
Abbreviation | NCB |
Unit | Currency (Euro / Dollar / YEN …) |