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How to calculate monthly burn rate in Excel and Google Sheets

Topic:SaaS metrics
Excel & Google Sheets
=AVERAGE(D2:D4)
✓

Verified example

Computed by a real spreadsheet engine on the sample data below.

MonthCash In ($)Cash Out ($)Net Burn ($)
Jan8000012000040000
Feb8500012500040000
Mar9000013800048000

=AVERAGE(D2:D4)→42666.6666666667

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Step by step

  1. 1Create a table with columns: Month (A), Cash In / Revenue (B), Cash Out / Expenses (C), Net Burn (D).
  2. 2In column B, enter total cash received each month (revenue collected, not accrued).
  3. 3In column C, enter total cash paid out each month (payroll, rent, SaaS tools, ad spend, etc.).
  4. 4In column D, calculate net burn per month as =C2-B2 (positive means burning cash). Copy down for each month.
  5. 5In a summary cell, compute the 3-month average burn with =AVERAGE(D2:D4) for a smoothed run rate.

Tips

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Frequently asked

What is the difference between gross burn and net burn?

Gross burn is total cash outflows with no offset. Net burn subtracts revenue received: Net Burn = Cash Out − Cash In. Net burn is the figure used to calculate runway.

Should I include one-time costs like fundraising expenses in burn rate?

Exclude truly one-time costs when presenting burn to investors for runway calculations. For internal cash management, include everything — you still need that cash.

How does burn rate differ from operating loss?

Operating loss is an accounting (accrual) figure. Burn rate is a cash concept — it reflects when cash actually moves, which is what determines runway.

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Formulas used

AVERAGESUMIFSUMIF

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