Burn Multiple Calculator
Calculate burn multiple from cash burned and net new ARR. Measure startup growth efficiency, monthly burn and ARR growth.
Calculate your result
Enter your numbers. Your estimate and charts update as you make changes.
Growth efficiency inputs
- Burn multiple
- 1.50x
- Net new ARR
- ₹1,20,00,000
- Monthly burn
- ₹15,00,000
- ARR growth
- 120.0%
What your numbers mean
You burn ₹1.50 for every ₹1 of new ARR.
Rule of thumb: 1.5×–2× is acceptable but worth watching; above 2× growth starts to look expensive.
You added about ₹10L of ARR a month while burning ₹15L.
ARR grew 120.0% over the year.
Understand your calculation
Burn multiple measures how much cash a startup burns to create each rupee of net new ARR. It is a growth efficiency metric, especially useful for SaaS and recurring-revenue companies. This calculator uses starting ARR, ending ARR, total cash burned and period length to estimate net new ARR, burn multiple, monthly burn and ARR growth.
Why use the Burn Multiple Calculator
Revenue growth alone can hide inefficient spending. Burn multiple connects growth to cash consumption. A company that adds ARR while burning very little cash is more efficient and usually has more strategic options. A high burn multiple signals that growth may be too expensive for the current funding environment.
Benefits at a glance
Efficiency view
Measure how much cash is spent to generate each rupee of net new ARR.
ARR growth context
See net new ARR and ARR growth alongside burn multiple.
Useful for board reviews
Track whether growth is becoming more or less capital efficient over time.
How to use the Burn Multiple Calculator
- 1
Enter starting ARR
Use ARR at the beginning of the measurement period.
- 2
Enter ending ARR
Use ARR at the end of the period.
- 3
Enter cash burned
Use net cash burned during the same period.
- 4
Review burn multiple
Lower values indicate more capital-efficient growth.
Worked example
Annual burn multiple example
A company grows from ₹1 crore ARR to ₹2.2 crore ARR over 12 months while burning ₹1.8 crore. Net new ARR = ₹2.2 crore − ₹1 crore = ₹1.2 crore. Burn multiple = ₹1.8 crore ÷ ₹1.2 crore = 1.5x. Monthly burn = ₹1.8 crore ÷ 12 = ₹15 lakh. ARR growth = ₹1.2 crore ÷ ₹1 crore = 120%.
- Net new ARR
- ₹1.2 crore
- Cash burned
- ₹1.8 crore
- Burn multiple
- 1.5x
- Monthly burn
- ₹15 lakh
- ARR growth
- 120%
The company spends ₹1.50 for every rupee of new ARR. Adding the same ARR on ₹1.2 crore of burn would bring the multiple to 1x.
How it's calculated
Net new ARR = ending ARR − starting ARR. Burn multiple = cash burned ÷ net new ARR, calculated only when net new ARR is positive; otherwise it's shown as a dash.
Monthly burn = cash burned ÷ number of months in the period. ARR growth % = net new ARR ÷ starting ARR × 100, which is undefined when starting ARR is zero.
Assumptions and exclusions
- Net new ARR is ending ARR minus starting ARR.
- Cash burn should be measured over the same period as ARR growth.
- Cash burn is net cash consumed, not gross operating expenses; use the same cashflow scope consistently.
- With no positive net new ARR, burn multiple is not meaningful and shown as a dash. With zero starting ARR, percentage ARR growth is undefined.
- The calculator does not adjust for deferred revenue, one-time costs or non-recurring ARR movements.
Frequently asked questions
What is burn multiple?
Burn multiple is cash burned divided by net new ARR over the same period.
What is a good burn multiple?
Lower is better. Many investors view below 1x as very efficient, 1x to 2x as solid and above 3x as a warning sign, depending on stage.
Can burn multiple be negative?
If ARR shrinks, net new ARR is negative and the metric is not meaningful. The calculator shows no valid ratio in that case.
Is burn multiple only for SaaS?
It is most common for recurring revenue businesses, but the same idea can be adapted to other startups using a consistent revenue metric.
Should I measure burn multiple monthly, quarterly or yearly?
Quarterly or yearly is usually more stable. Monthly ARR can jump around with a single large contract or a churned account, which makes one month's ratio noisy. Whatever period you pick, measure ARR change and cash burn over exactly the same months.
How can a startup lower its burn multiple?
Either add more net new ARR for the same spend or spend less for the same ARR. Cutting churn helps directly, because lost ARR reduces net new ARR. Better sales efficiency and pricing help too. The SaaS unit economics page shows whether CAC and payback are the weak point.
Final word
Use the burn multiple calculator alongside runway and unit economics. It helps explain whether growth is being bought efficiently or whether the company needs to improve retention, sales efficiency or operating discipline.
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