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Definition · burn

Net burn

Net burn is gross cash burn minus revenue over a period, showing the true cash loss that determines runway. For net burn, the useful boundary is the source cash view, timing horizon, owner, liquidity exposure, and operating decision before payment timing, runway, or financing options change.

Also known as net burn rate, net cash burn, net monthly burn

Written by Pluvo TeamReviewed by Pluvo Team
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Why it matters

Understanding net burn matters because cash decisions are time-sensitive. Teams need to know when money moves, which balance changes, who owns the next action, and what can still be changed before liquidity tightens. Pluvo computes net burn from live revenue and operating outflows and explains period-over-period changes by their underlying drivers.

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In practice

  • Liquidity example

    Finance teams use net burn when they need to understand cash timing before a decision is made. A team might compare expected receipts, payroll, vendor payments, and debt obligations to decide what action is needed this week.

  • Pluvo example

    Pluvo computes net burn from live revenue and operating outflows and explains period-over-period changes by their underlying drivers.

In practice, teams should define net burn with a clear source, owner, time period, and decision before they use it in reporting, planning, or operating reviews.

Understanding net burn matters because cash decisions are time-sensitive. Teams need to know when money moves, which balance changes, who owns the next action, and what can still be changed before liquidity tightens. Pluvo computes net burn from live revenue and operating outflows and explains period-over-period changes by their underlying drivers.

A strong workflow for net burn separates the definition from the action: first agree what the term means, then decide how it is measured, when it changes, and who is accountable for the next step.

Pluvo computes net burn from live revenue and operating outflows and explains period-over-period changes by their underlying drivers.

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FAQ

What is net burn?

Net burn is gross cash burn minus revenue over a period, showing the true cash loss that determines runway. For net burn, the useful boundary is the source cash view, timing horizon, owner, liquidity exposure, and operating decision before payment timing, runway, or financing options change.

How do you calculate net burn rate?

To calculate net burn, define the source data, time period, comparison basis, and owner before applying the formula. The useful answer is not only the math; it is whether the inputs and timing match the decision the metric supports.

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Sources

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