Burn Multiple Calculator

The Burn Multiple is the cleanest measure of how efficiently a startup turns cash into growth, and this calculator works it out in moments. Popularised as a simple, hard-to-game efficiency metric, the Burn Multiple divides the net cash a business burned over a period by the net new ARR it added in that period. It answers a blunt and important question: how many dollars are you burning to generate each dollar of new recurring revenue? A Burn Multiple of one means you burned a dollar for every dollar of new ARR, decent efficiency, while below one is excellent, signalling a business that grows on remarkably little cash. A high multiple, say above two or three, means growth is expensive and cash-hungry, which matters enormously when capital is scarce or costly. Because it uses net burn and net new ARR, it captures the whole picture, including churn and operating losses, making it far harder to flatter than gross growth figures. This calculator makes it clear. You enter your net cash burn for the period and your net new ARR, the increase in annual recurring revenue after churn, and it returns your Burn Multiple, the two inputs, and a verdict on efficiency. The results update as you type. Use it to gauge capital efficiency, to benchmark against investor expectations, or to track whether your growth is becoming more or less cash-hungry over time. The Burn Multiple is net burn divided by net new ARR. The lower the better: under one is great, one to one-and-a-half is good, one-and-a-half to two is okay, and above two warrants attention. In a tight funding environment, a low Burn Multiple is a powerful signal that a business can grow without endlessly raising capital, which is exactly why investors have made it a favourite efficiency yardstick.

Burn Multiple = net cash burn / net new ARR. Lower is better: under 1 excellent, 1-1.5 good, 1.5-2 okay, above 2 needs attention. Uses net figures, so it captures churn.