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burn rate

how fast a company spends its cash reserves

In Business & Marketing

In more detail

1. (noun) the speed at which a company spends money, especially its cash reserves

2. (noun) the amount of fuel consumed per unit of time by an engine or rocket

Examples

• 1. The startup's high burn rate means it will run out of money in six months if it doesn't earn more revenue.
• 2. The rocket's burn rate determines how long it can stay in the air.

How to use burn rate

Burn rate is primarily used in business and finance contexts to describe how quickly a company depletes its cash reserves, especially common when discussing startups and venture-funded companies. It can also apply to fuel consumption in aerospace and engineering. The term carries a slightly negative connotation in business, suggesting unsustainable spending if not managed carefully.

Common phrases

• high burn rate
• reduce the burn rate
• monthly burn rate
• sustainable burn rate
• increase burn rate

Synonyms

cash burn · spending rate · consumption rate · expenditure rate

Word family

burn · rate

A common mistake

Learners sometimes confuse burn rate with profit margin or revenue, when burn rate specifically measures cash outflow, not profitability or income.

Nearby in Business & Marketing

bottom line, brainstorming, break-even, buyout, cannibalization, cold call

Keep going

How to remember the words you read · Spaced repetition, explained