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
- Can Westport Innovations Keep Cutting Costs and Turn Sales Around?
- 3 Biotech Stocks That Could Double Before 2016
- Is Ariad Pharmaceuticals a Cheap Stock?
- 3 Questions Dyax Needs to Answer on Wednesday
- Can Cliffs Natural Resources Earnings Ever Recover?
- 3 Key Takeaways From Peregrine Pharmaceuticals' Fourth-Quarter Results