WORKED DEFAULT
Check the calculation with the default inputs
$1.5 million net cash burn divided by $1.0 million net new ARR gives a 1.500x burn multiple.
- Net cash burn$1.50m
- Net new ARR$1.00m
- Calculate burn multiple$1.50m / $1.00m = 1.500x
SAAS / CASH EFFICIENCY
Compare positive net cash burned during a period with positive net new ARR added over the same consistently measured interval.
METHOD / WORKED EXAMPLE
Compare positive net cash burned during a period with positive net new ARR added over the same consistently measured interval. The workspace keeps the period, cohort, and classification choices visible because similarly titled SaaS metrics are not standardized.
WORKED DEFAULT
$1.5 million net cash burn divided by $1.0 million net new ARR gives a 1.500x burn multiple.
READ THE RESULT
A lower positive multiple means less entered burn per unit of entered ARR growth; it does not measure profitability or funding adequacy.
ASSUMPTIONS AND LIMITS
Working-capital timing, financing cash flows, acquisitions, annual prepayments, capitalization, and ARR policy can materially distort comparison.
COMMON QUESTIONS
Use one entity, currency, reporting interval, recurring-revenue definition, customer identity rule, and acquisition policy across every input. Cash burn and ARR change cover the same business and interval. Net new ARR is positive and uses one stable definition. Reconcile each value to the same operating records. A mathematically correct result can still be misleading when cohorts, periods, contract types, expense boundaries, or foreign-exchange conventions differ.
A lower positive multiple means less entered burn per unit of entered ARR growth; it does not measure profitability or funding adequacy. Track the metric across consistently prepared periods and explain material definition changes. Pricing, acquisitions, contract timing, annual prepayments, currency, customer consolidation, consumption revenue, one-time services, and accounting presentation can move a result without representing the same operating change.
No. This educational calculator applies disclosed arithmetic to supplied values; it is not GAAP revenue, an audit, forecast, valuation, fundraising recommendation, or investment decision. Working-capital timing, financing cash flows, acquisitions, annual prepayments, capitalization, and ARR policy can materially distort comparison. Keep the source records and metric definition, reconcile changes, test alternative conventions, and obtain qualified review before using the result in a material decision.
RELATED TOOLS
Use boundary
Use one documented cash-burn convention, calculate positive net new ARR over the same interval, and divide burn by that recurring-revenue increase.
Burn multiple = positive net cash burn / positive net new ARR.