Burn multiple calculator
How efficiently you turn cash into recurring revenue, in one number investors reach for first. How many dollars you burn to add a dollar of ARR — lower is better.
New annual recurring revenue gained, minus any lost.
Cash out minus cash in, same period.
1.50×
- Cash burned per $1 of new ARR$1.50
Reasonable
Fine if you're early or investing ahead of revenue — just watch it improve over time.
Benchmark Under 1.5× is efficient; over 2× draws questions
Where you land
The widely-used efficiency bands — a guide, not a verdict.
Why it matters
Two companies can grow at the same rate while one sets cash on fire and the other doesn't. Burn multiple separates them in a single number — which is why it's become a standard gut-check, especially when funding is tight.
Stop recalculating by hand
Radley Finance keeps this metric — and every other — live from one model, with the same benchmarks built in. Investor-ready in under an hour.
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