Burn Multiple
What is Burn Multiple?
Burn Multiple measures capital efficiency by comparing net burn against net new ARR over a period.
Burn Multiple Formula
Burn multiple = Net Burn / Net New ARR over a time period | Variable | Meaning |
|---|---|
Net Burn | Cash burned net of cash inflows over the period. |
Net New ARR over a time period | Net new annual recurring revenue added during the period (new + expansion − churned − contraction ARR). |
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How to Calculate Burn Multiple
Worked example
- Net Burn
- $2,000,000
- Net New ARR over a time period
- $1,000,000
- → Burn Multiple
- 2
Burn Multiple Calculator
Burn multiple = Net Burn / Net New ARR over a time period | Variable | Meaning |
|---|---|
Net Burn | Cash burned net of cash inflows over the period. |
Net New ARR over a time period | Net new annual recurring revenue added during the period (new + expansion − churned − contraction ARR). |
Worked example
- Net Burn
- $2,000,000
- Net New ARR over a time period
- $1,000,000
- → Burn Multiple
- 2
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Burn Multiple FAQ
How do you calculate Burn Multiple?
Burn multiple = Net Burn / Net New ARR over a time period
More questions? See the full Burn Multiple FAQ.