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Burn Multiple is a measure of capital efficiency, comparing how much ARR a company adds in a period to how much cash was burned.

For quarterly and annual aggregation, the quarterly/annual burn figure is used. For the ARR calculation in the denominator, the last month of the period is used.

While Burn Multiple is calculated using burn by default, if SaaSGrid does not have cash balance figures Burn Multiple will be calculated using net income. You can also toggle to using net income in settings, which can be helpful in analyzing business efficiency excluding cash flow cycles. To calculate Burn Multiple using net income:

For quarterly and annual aggregation, revenue and costs in the numerator use the sum of all months in the period. For the ARR calculation in the denominator, the last month of the period is used.

If a company increases its cash (when burn is used) or is profitable (when net income is used) in a period, the Burn Multiple will be negative. If ARR does not increase in a period, a value for Burn Multiple will not be returned.