The cash burn is the amount of money an unprofitable company is using to run its business. It shouldn't be confused with the loss on the income statement as that usually includes non-cash expenses like employee stock options.
The cash burn is helpful in determining how long a company can survive until it will need to get further financing or go bankrupt.
Recent Mentions on Fool.com
- Westport Innovations Q3 Earnings: Major Changes Underway... but Is It Too Late?
- Investing in Socially Responsible Companies: Pandora Media, Inc.
- Westport Innovations Earnings Preview: Can We Have Some Good News, Please?
- Could MannKind Corporation Be Running Out of Money?
- Why I Won't Buy Ebola Stocks
- Clean Energy Fuels Q3 Earnings: Turning the Corner?