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
- Why OncoMed Pharmaceuticals, Unilife, and Tesla Motors Are Today's 3 Best Stocks
- 5 Black Friday Deals You Won't Want to Miss
- Sequenom Is Recovering on Some Good News
- Clarifying Breakthrough Designation at the FDA
- Keep an Eye on Pacific Biosciences, Epizyme, and Merrimack Today
- J.C. Penney Is Not in the Clear Yet