# Burn multiple

> Burn multiple is a cash and runway metric, calculated as Net burn ÷ Net new ARR, over the same period. Efficiency; lower is better — under 1× is excellent, over 2× is a warning (David Sacks's bands). Undefined when net new ARR is zero or negative.

Source: https://lopifi.com/glossary/burn-multiple
Part of: Lopifi — US GAAP books on autopilot, reviewed by a CPA (https://lopifi.com)

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**What is burn multiple?** Burn multiple is a cash and runway metric, calculated as Net burn ÷ Net new ARR, over the same period.

## Formula

`Net burn ÷ Net new ARR, over the same period`

## Note

Efficiency; lower is better — under 1× is excellent, over 2× is a warning (David Sacks's bands). Undefined when net new ARR is zero or negative

- **Category:** Cash & runway
- **Specified in:** [Metric definitions](https://lopifi.com/md/docs/domain/10-metrics)
- **Related:** net-burn, period, runway