Net Burn

I. Formal Definition

The cash outflow of an organisation in a period after netting against cash inflow from operations. Net burn is the runway driver: a positive net burn consumes cash, a negative net burn generates cash. The federation requires net burn to be reported with reconciliation to the operating section of the cash flow statement and to the cash position roll-forward. Working capital swings that distort net burn from underlying economic activity are footnoted with their normalised effect under MEV-Annex:4.1. Net burn is a quarterly input to the IFO4 Score.

II. Etymology

A modifier of the gross burn construction; the framing distinguishes the cash-consuming velocity from the cost commitment magnitude.

III. Federation Usage

Federation members publish net burn monthly with reconciliation to cash flow statement and cash position. Material working capital effects are normalised in a footnote. Net burn is monitored continuously between disclosure cycles for steward tier members.

IV. Related Terms

• gross-burn
• burn-rate
• runway
• free-cash-flow

V. Authoritative Citations

• UFMS-001:3.1UFMS Article III - Net Burn
• MEV-Annex:4.1MEV Annex IV - Net Burn Reporting

VI. Citation in BibTeX

@misc{ifo4_glossary_net_burn,
  title        = {{Net Burn}},
  author       = {{IFO4 Federation Editorial Board}},
  howpublished = {{IFO4 Federation Glossary, slug \texttt{net-burn}}},
  year         = {2026},
  url          = {https://ifo4.org/glossary/net-burn},
  note         = {Category: Capital; key: NetBurn}
}

VII. Challenge This Definition

Federation members and accredited practitioners may challenge any entry under TGS-002:1.7. Filed challenges are routed to the editorial board, triaged into the revision register, and resolved in writing on the public docket. The slug remains stable through any revision.