30-Day and 13-Week Operating Cash Burn

What is 30-Day and 13-Week Operating Cash Burn?

30-day and 13-week operating cash burn are also known as the “burn rate.” These are the rates at which a business consumes its cash reserves when it isn’t bringing in profit.

The standard burn rate formula is as follows:

30-day and 13-week operating cash burn = [(starting balance of 13-week period - ending balance of 13-week period)/3] x 3.25

Cash burns don’t always point to a failing business; instead, this situation can result from anticipated seasonal trends or other factors that aren’t necessarily red flags. However, a company should always keep a close eye on its financial situation during periods of cash burn.

Related terms

Average Days Delinquent

Average day(s) delinquent (ADD) is a metric that helps determine the efficiency of a company’s debt collection efforts.

Budgeting and Planning

Budgeting and planning is the process of setting financial goals, creating a detailed plan to achieve those goals, and allocating resources to various activities and initiatives within an organization.

Business Intelligence

Business intelligence (BI) refers to the use of technology, tools, processes, and methodologies to analyze and transform raw data into actionable insights for making informed business decisions.

Cash Conversion Cycle

The cash conversion cycle (CCC) measures the rate at which your business converts its investments and inventory into cash.

Cash Flow Coverage Ratio

A company’s cash flow coverage ratio (CFCR) clarifies its ability to pay its debts based on cash flow from operations.

Cash Flow Optimization

This strategy focuses on maximizing the inflow of cash while efficiently managing outflows to maintain a healthy liquidity position.