# Burn multiple calculator

> Net burn divided by net new ARR. The cleanest read on how expensive your growth is. See the formula, change the inputs and save your results.

Source: https://saas-marketing.net/calculators/burn-multiple/
Topic: SaaS Metrics and Analytics
Type: calculator
Published: 2026-09-17
Last updated: 2026-09-17
Publisher: SaaS Marketing (saas-marketing.net)
License: CC BY 4.0. Quote or republish with attribution and a link to https://saas-marketing.net/calculators/burn-multiple/

## Short answer

Burn multiple uses net cash burn in the period, net new arr in the period to estimate burn multiple. Change the example inputs to your own figures. The result is a planning calculation, not an industry benchmark or a prediction.

## Key takeaways

- The main result is burn multiple; the formula is shown below.
- Keep the reporting period, currency and customer cohort consistent across inputs.
- Defaults are an illustrative scenario. A blank, invalid or undefined ratio displays as n/a.

---

Use this tool alongside the [saas metrics guide](/saas-metrics/). Net burn divided by net new ARR. The cleanest read on how expensive your growth is.

<Calculator id="burn-multiple" cluster="saas-metrics" />

## Which inputs do you need?

| Input | Example value | What to check |
| --- | --- | --- |
| Net cash burn in the period | 2,200,000 | Use the value from the same reporting period as the other inputs. |
| Net new ARR in the period | 1,800,000 | Use the value from the same reporting period as the other inputs. |

Before entering numbers, choose the unit of analysis. An account, a user and a paying subscription are different objects. Counting users in one field and accounts in another can produce a precise answer to the wrong question. Record the start and end dates beside your source export so another person can reproduce your work.

## What formulas does the calculator use?

### Burn multiple

```text
multiple = newarr > 0 ? burn / newarr : NaN
```

This output is expressed as a ratio.

### Cash burned per dollar of new ARR

```text
perdollar = multiple
```

This output is expressed as currency in the same units as the inputs.

Percent fields use whole percentages: enter 5 for five percent. The formula divides by 100 where a decimal rate is needed. Values in the formulas correspond to the labelled inputs above; earlier outputs can be used by later formulas.

## Worked example

The defaults are a constructed scenario, not results from a named company or survey. With the example inputs above, the calculation produces:

| Output | Example result |
| --- | --- |
| Burn multiple | 1.22 |
| Cash burned per dollar of new ARR | 1.22 |

Change one assumption at a time and watch the main result. Then test a conservative case by reducing the expected benefit or increasing the associated cost. If a decision works only at the most optimistic settings, investigate the uncertain input before committing the budget.

## How should you interpret the result?

A formula describes the assumptions entered into it. It cannot establish that a channel caused a sale, that historical retention will continue, or that a projected cost is achievable. Compare the output with your own previous cohorts before using a broad market comparison.

For a management review, save the result together with the source date, segment, owner and planned action. Recalculate when the underlying input changes. Keep a separate copy of the original scenario so the team can explain the difference between the plan and the observed outcome.

## Continue the analysis

Use the [metrics guide](/saas-metrics/) to align definitions, browse [all calculators](/calculators/) for adjacent calculations, and keep a [measurement worksheet](/resources/) beside the model. The [pricing hub](/saas-pricing/) and [growth hub](/saas-growth/) cover decisions that often change these inputs.
{/* expanded-practice-2026-09 */}
## Apply burn multiple calculator in a working review

Record the source and unit of every input before using the result. Change one assumption at a time to understand which inputs matter most. Keep outputs that describe money, time and percentages distinct, and preserve undefined cases rather than converting them into plausible-looking zeroes.

For this topic, involve the metric owner and the source-system owner and work from metric dictionary, source records and cohort definition. The relevant unit is a consistent account, user, event or revenue cohort. State the question the review should resolve before choosing a chart, an asset or a tool. If participants disagree about the unit or scope, resolve that disagreement before combining their evidence.

### Evidence to prepare

Write the numerator, denominator, unit, period, source and exclusions before interpreting the number. Separate observed data from assumptions and forecasts. A metric can be calculated correctly while still answering the wrong business question.

| Review field | What to record |
| --- | --- |
| Topic | Burn multiple calculator |
| Decision | The specific action this explanation should help you choose |
| Working evidence | metric dictionary, source records and cohort definition |
| Unit and scope | a consistent account, user, event or revenue cohort |
| Responsible people | metric owner and the source-system owner |
| Remaining uncertainty | The missing fact that could change the decision |

### Two situations that can change the interpretation

#### When a metric changes without a version record

Removing internal accounts from a denominator can improve a rate without any customer behavior changing.

Use this check: Compare event logic, exclusions, identity rules and source systems across the change date. Do not rewrite historical figures silently when stakeholders rely on prior reports.

The [focused diagnostic guide](/guides/metric-definition-changes-without-version/) provides the correction process and a working evidence sheet.

#### When CAC mixes new and existing customers

Dividing this month's acquisition spend by the entire installed base produces a number that does not describe customer acquisition cost.

Use this check: Check the cost scope, new-customer definition and acquisition cohort timing. Costs and conversions must cover comparable periods or cohorts.

The [focused diagnostic guide](/guides/cac-denominator-includes-existing-customers/) provides the correction process and a working evidence sheet.

### Record the decision and the limit

Twenty activated accounts divided by eighty eligible accounts is 25%. Dividing the same twenty accounts by two hundred individual signups produces 10%, but it mixes units. Both inputs can be real while the second ratio is unsuitable for an account-activation claim.

Keep the conclusion beside the evidence that supports it. Record what the team will do, who owns the next action and which event or date will trigger a review. If the underlying definition, audience or product behavior changes, revisit the conclusion rather than assuming the old result still applies. A clear limit is useful information; it tells the next reader where additional investigation is required.

Use the [complete topic collection](/topics/saas-metrics/) for related methods and the [category field guides](/industries/) when the product's buying situation or implementation requirements change how the method should be applied.

### A reproducible sensitivity exercise

The [burn multiple calculator tool](/calculators/burn-multiple/) provides a related numerical exercise. Its current default inputs are constructed examples, not industry observations. Under those defaults, the output labelled **Burn multiple** is **1.22** in the tool's displayed units. The table changes one input at a time and leaves the others at their defaults.

| Input changed | Default input | Alternative input | Burn multiple after change |
| --- | --- | --- | --- |
| Net cash burn in the period | 2,200,000 | 2,640,000 | 1.47 |
| Net new ARR in the period | 1,800,000 | 2,160,000 | 1.02 |

The alternative inputs are sensitivity cases, not recommended targets. A result marked not defined means the proposed combination does not satisfy the model or produces an undefined ratio. Keep that state visible. If the output changes sharply after a small input change, investigate the uncertain input before using the model to justify a larger commitment.

Compare the model's scope with the concept on this page. The calculator may represent one particular application rather than every use of the term. Record the reporting period, currency where relevant, and the source of the real values you enter.

## Frequently asked questions

### How does this burn multiple calculator work?

It evaluates the formulas shown on this page in your browser. Net burn divided by net new ARR. The cleanest read on how expensive your growth is. Inputs are not sent to a calculation server.

### Are the default values SaaS industry benchmarks?

No. They are example inputs chosen to demonstrate the calculation. Replace them with your billing, CRM or finance records before making a decision.

### Why does a result show n/a?

The calculation is undefined or an input is outside its allowed range. Check for an empty field, a zero denominator or an impossible percentage before interpreting the result.

### Can I save or share my calculation?

Use Print or save results to create a local PDF with your browser. Review the inputs before sharing and remove confidential customer or company information.