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Burn Multiple (Efficiency) Calculator

Calculate burn multiple, period burn, and cash-to-ARR efficiency.

Burn Multiple (Efficiency) Calculator

Measure capital efficiency by comparing burn to net new ARR.

Enter your metrics

Formula

Period burn = net burn per month × period months.

Burn multiple = period burn ÷ net new ARR in the same period.

ARR efficiency = net new ARR ÷ period burn.

Use the same time window for burn and ARR change to avoid distortions.

Steps

  • Enter net burn per month (cash out minus cash in).
  • Enter net new ARR added in the same period.
  • Enter the number of months in that period (e.g., 1 for monthly, 3 for quarterly).
  • Review burn multiple, efficiency, and improvement ideas.

Additional calculations

Enter burn and ARR change to see burn multiple.

Related calculators

Burn Rate Calculator

Measure gross and net burn each month.

Runway Extension Calculator

See how savings and new capital extend runway.

ARR Growth Calculator

Track ARR expansion over time.

SaaS CAC (Customer Acquisition Cost) Calculator

Measure acquisition cost per customer to improve efficiency.

Burn Multiple: Measuring SaaS Efficiency

Burn multiple shows how many dollars you burn to add a dollar of ARR. Lower is better; track it monthly and quarterly to keep efficiency visible.

Table of Contents

Definition and Formula

Burn multiple = cash burned over a period ÷ net new ARR in that period. Use net burn (cash out minus cash in) and net new ARR (including churn) to stay consistent.

Benchmarks by Stage

Seed/Series A: aim < 1.5 while proving product-market fit. Growth: strive for 1.0–1.5 with scalable go-to-market. Late stage: sub-1 is elite.

Improving Burn Multiple

  • Prioritize channels with CAC payback under 12 months.
  • Expand existing customers (NDR) to raise ARR without proportional burn.
  • Stage hiring against pipeline and conversion proof.

Common Pitfalls

Mixing periods (monthly burn vs quarterly ARR change) or excluding churn can overstate efficiency. Ensure ARR and burn align in time and scope.

Operating Cadence

Report burn multiple monthly, show a 3-month rolling average, and pair it with CAC payback and LTV:CAC to keep capital productivity tight.

FAQs

What is burn multiple?

Burn multiple = net burn over a period divided by net new ARR in that same period. It measures how efficiently cash is converted into recurring revenue.

What is a good burn multiple?

Elite: <1, Strong: 1–1.5, OK: 1.5–2.5, Risky: >2.5. Benchmarks vary with growth stage and market.

Should I use ARR or MRR?

Use ARR for annualized growth. If you track MRR change, convert to ARR by multiplying by 12 to keep units consistent with burn multiple benchmarks.

Do I include capital expenditures?

Use net burn from the cash flow statement. Exclude one-time financing flows but include opex, capex, and working capital changes that consume cash.

How often should I track?

Track monthly and summarize quarterly. Consistency lets you see trendlines and the impact of go-to-market or efficiency programs.

Summary

Calculate burn multiple, period burn, and ARR efficiency to monitor capital productivity.

Outputs mirror the Vitamin K layout: metrics, recommendations, action plan, formula, steps, guide, related tools, and FAQs.

Use these insights to keep LCP low by pairing burn multiple with payback and CAC controls.

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Burn Multiple (Efficiency) Calculator

Calculate burn multiple, period burn, and cash-to-ARR efficiency.

How to use Burn Multiple (Efficiency) Calculator

Step-by-step guide to using the Burn Multiple (Efficiency) Calculator:

  1. Enter your values. Input the required values in the calculator form
  2. Calculate. The calculator will automatically compute and display your results
  3. Review results. Review the calculated results and any additional information provided

Frequently asked questions

How do I use the Burn Multiple (Efficiency) Calculator?

Simply enter your values in the input fields and the calculator will automatically compute the results. The Burn Multiple (Efficiency) Calculator is designed to be user-friendly and provide instant calculations.

Is the Burn Multiple (Efficiency) Calculator free to use?

Yes, the Burn Multiple (Efficiency) Calculator is completely free to use. No registration or payment is required.

Can I use this calculator on mobile devices?

Yes, the Burn Multiple (Efficiency) Calculator is fully responsive and works perfectly on mobile phones, tablets, and desktop computers.

Are the results from Burn Multiple (Efficiency) Calculator accurate?

Yes, our calculators use standard formulas and are regularly tested for accuracy. However, results should be used for informational purposes and not as a substitute for professional advice.