How to Calculate Burn Rate in Looker

Calculating your company's burn rate is essential for understanding your financial health and runway. It tells you exactly how fast you're spending your cash reserves. This article will guide you through calculating this crucial metric directly within Looker, whether you're a developer working with LookML or an analyst building reports in the Explore interface.

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What is Burn Rate, and Why Does it Matter?

In simple terms, burn rate is the speed at which your company is losing money. It’s a vital metric for startups and businesses operating on investor capital, but it's just as important for any company aiming for sustainable growth. Keeping a close eye on it helps you forecast how long you can operate before running out of money - a concept known as "cash runway."

There are two types of burn rate to consider:

• Gross Burn Rate: This is the total amount of operating costs your company incurs each month. It includes everything from salaries and rent to software subscriptions and marketing spend.
• Net Burn Rate: This is the number most people refer to when they talk about "burn rate." It's the true measure of how much cash your company is losing. The formula is straightforward: Net Burn = Total Expenses - Total Revenue

If your net burn is $50,000 per month, it means your company's cash position decreases by that amount every month. Monitoring this metric helps you make critical strategic decisions, such as when to fundraise, where to cut costs, or when to push for more sales.

Prepare Your Data for Looker

Before you can build anything in Looker, you need to have the right data available. Your burn rate calculation is only as accurate as the financial data you feed it. This data typically originates from accounting software like QuickBooks, Xero, Stripe, or a more comprehensive ERP system.

Whatever the source, the data should be consolidated in a database or data warehouse that Looker can connect to. To calculate burn rate, your dataset will need a few key fields at a minimum:

• Date: A timestamp for each transaction (e.g., transaction_date)
• Amount: The monetary value of the transaction (e.g., transaction_amount)
• Category: A field that distinguishes between different types of transactions (e.g., 'Salaries', 'Software', 'Sales Revenue')
• Type: A clear flag to identify money coming in versus money going out (e.g., 'expense' or 'revenue')

A well-structured transactions table containing this information is the ideal foundation for building burn rate calculations in Looker.

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Two Ways to Calculate Burn Rate in Looker

Looker offers two primary methods for calculating metrics like burn rate. The one you choose depends on your role, your access level, and how you plan to use the calculation.

1. Using LookML: This is the most robust and scalable method. By defining the logic in your project's LookML code, you create a permanent, reusable metric that anyone at your company can use. This path requires developer permissions.
2. Using Table Calculations: This is a faster, more flexible approach for ad-hoc analysis. You can create the calculation directly in a Look or a dashboard tile, making it perfect for one-off reports or when you don't have LookML access.

We'll walk through both methods step-by-step.

Method 1: Calculating Burn Rate with LookML

Using LookML is the best practice for establishing official business metrics. It centralizes the logic, ensures consistency, and makes the metric easily accessible across your organization. Let's assume you have a view file named transactions.view.lkml based on your financial data table.

Step 1: Define Your Base Measures for Revenue and Expenses

First, you need to create separate measures to sum up your revenue and your expenses. You can do this by using a filter parameter within each measure to isolate the specific transaction types you need.

In your transactions.view.lkml file, add the following LookML:

measure: total_expenses {
  type: sum
  sql: ${TABLE}.amount ,,
  value_format_name: usd
  filters: [transaction_type: "expense"]
}

measure: total_revenue {
  type: sum
  sql: ${TABLE}.amount ,,
  value_format_name: usd
  filters: [transaction_type: "revenue"]
}

This code tells Looker to create two distinct measures. total_expenses will only sum the values where the transaction_type field is 'expense', and total_revenue will do the same for 'revenue'.

Step 2: Create a Measure for Net Burn

Now that you have your two building blocks, combine them to create the net burn measure. This will be a simple measure of type: number that subtracts revenue from expenses.

measure: net_burn {
  label: "Net Burn"
  type: number
  sql: ${total_expenses} - ${total_revenue} ,,
  value_format_name: usd
}

This net_burn measure references the previous two measures. The beauty of this approach is that if the definitions of total_expenses or total_revenue ever change, net_burn will update automatically.

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Step 3: Explore and Visualize Your New Metric

With these measures saved and deployed to production, any Looker user can now head to the Explore interface. They can select:

• A time dimension (e.g., Transaction Month)
• The new Net Burn measure

And instantly generate a report showing the company's net burn over time. They can visualize this as a line chart, column chart, or single value tile on a dashboard. The logic is handled once, correctly, and for everyone.

Method 2: Calculating Burn Rate with Table Calculations

If you don’t have access to your project’s LookML or need a quick answer for a specific analysis, a Table Calculation is your best friend. This method allows you to perform spreadsheet-style calculations on the data returned in an Explore query.

Step 1: Build Your Base Report in an Explore

Navigate to the Explore where your financial transaction data resides.

1. From the field picker on the left, select a time dimension like Transaction Month.
2. Next, select the measures for Total Expenses and Total Revenue.
3. Click Run to generate the initial data table.

You should now have a table with three columns: Transaction Month, Total Expenses, and Total Revenue.

Step 2: Create a Table Calculation for Net Burn

Now, let's add the burn rate calculation.

1. In the Data section, click the + Add calculation button on the right side of the column headers. This opens the table calculation editor.
2. Give your calculation a name, such as "Net Burn".
3. In the formula box, type the expression. Field names in table calculations are referenced with a dollar sign and curly braces:

${total_expenses} - ${total_revenue}

1. Underneath the formula box, select a format. For financial data, choosing Currency is best.
2. Click Save.

A new "Net Burn" column will instantly appear in your data table, displaying the result of your formula for each row.

Step 3: Visualize and Save Your Analysis

With your new calculation in place, you can now refine your report.

• Clean up the table: You can hide the original Total Expenses and Total Revenue columns by clicking the gear icon on their column headers and selecting "Hide from Visualization."
• Choose a visualization: A column chart is great for showing changes in net burn over time. A single value visualization can display the burn for the most recent month.
• Save your work: Once you're happy with the result, you can save it as a Look or add it as a new tile to a dashboard.

Advanced Burn Rate Dashboards in Looker

Once you've mastered the basic calculation, you can enrich your analysis to get more actionable insights.

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Calculating Cash Runway

Runway shows how many months you can operate with your current cash and average burn rate. To calculate it in Looker, you'll also need your current cash balance. You could pull this from another data source or manually enter it in a table calculation.

A simple runway formula in a table calculation would be:

[Your Current Cash Balance] / mean(${net_burn})

For a more accurate figure, it's better to use a rolling average of your recent burn rate, like the past 3 or 6 months. A table calculation for a 3-month average burn runway would look like this:

[Your Cash Balance] / mean(offset_list(${net_burn}, -2, 3))

Segmenting Your Burn Rate

The real power comes from understanding what is driving your burn. Use Looker to segment your expenses by adding dimensions to your Explore. Add a dimension like Department or Expense Category to your table to create a stacked column chart or pie chart. This immediately highlights which areas of the business are contributing most to your total spend, helping you spot opportunities for optimization.

Setting Up Alerts

Be proactive instead of reactive. Looker lets you create alerts based on the results of a dashboard tile. You could set up an alert that sends you an email or a Slack notification if your monthly burn rate exceeds a predefined budget. This gives you an early warning system to investigate significant overruns before they become a major problem.

Final Thoughts

Tracking your burn rate in Looker gives you a powerful, real-time pulse on the financial health of your business. Whether you build a reusable metric in LookML for consistency or spin up a quick table calculation for a one-off question, the tools are there to turn raw financial data into clear, strategic information.

Instead of wrestling with LookML code or creating manual table calculations every time, we designed Graphed to streamline this entire workflow. By connecting your data sources like QuickBooks, Stripe, and Google Analytics, we enable you to get answers in seconds. You can just ask "what was our net burn last quarter broken down by department?" and instantly get a live-updating chart, without needing to configure a single formula or line of code.