Burn Multiple Calculation Tool
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The Burn Multiple is an important metric used by startups and investors to assess the efficiency of a company's capital expenditure relative to its revenue generation. By calculating this multiple, companies can understand how much cash they are burning to generate each dollar of revenue, which is vital for determining the sustainability of their business model and the potential runway they have before requiring more funding.
Historical Background
The burn multiple has gained prominence as a key financial metric for startups, especially in venture capital (VC) and private equity circles.