How To Calculate Cash Burn in MS Dynamics | Arithmix

Calculating cash burn is an essential process for any business, regardless of its size or industry. It helps you determine how much money your company is spending each month and how quickly you are burning through your cash reserves. By calculating your cash burn, you can identify potential cash flow problems and take corrective action before it's too late.

What Is Cash Burn?

Cash burn is the rate at which a company is spending its cash reserves. It is calculated by subtracting the total cash outflows from the total cash inflows over a specific period. The resulting figure represents the net cash burn for that period. This metric is important because it helps you understand how much money your company is spending and how quickly you are burning through your cash reserves.

For example, if your company has $100,000 in cash reserves and you are spending $10,000 per month, your cash burn rate is $10,000 per month. This means that you will run out of cash in 10 months if you don't take any corrective action.

When Is It Valuable To Calculate Cash Burn?

Calculating cash burn is especially valuable for startups and early-stage companies that are not yet profitable. These companies typically rely on external funding to finance their operations, and cash burn is a critical metric for investors and lenders to evaluate the company's financial health.

However, even established companies should calculate their cash burn regularly to ensure that they are not overspending and to identify potential cash flow problems before they become critical. By monitoring your cash burn, you can make informed decisions about your spending and take corrective action if necessary.

Overall, calculating cash burn is an essential process for any business that wants to manage its cash flow effectively and ensure its long-term financial health.

How Do You Calculate Cash Burn in MS Dynamics

MS Dynamics itself isn’t naturally geared towards letting you calculate complex metrics like Cash Burn. As an alternative, teams typically use products like Arithmix to import data from MS Dynamics and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like MS Dynamics, combine it with data from other systems, and create calculations like Cash Burn.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Cash Burn in Arithmix

Calculating metrics like Cash Burn is simple in Arithmix. Once you've created your free account, you’ll be able to import your MS Dynamics data, and use it to create natural language formulas for metrics like Cash Burn.

Arithmix is designed to give you the power to build any calculations you want on top of your MS Dynamics data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.