The ratio shows a company’s burn rate in comparison with how it is adding new annual recurring revenue (ARR). It’s a concept that is particularly applicable to SaaS companies, because they offer subscription services. But it’s also a valid formula for any business with high growth potential. 
The higher the Burn Multiple, the more the startup is burning to achieve each unit of growth. The lower, the more efficient the growth is. Burn Multiple under 1x=amazing. 1-1.5=Great. 1.5-2x=Good, 2-3x=suspect, Over 3x=bad.
 NoBlue. Retrieved May 21, 2021, from https://noblue.co.uk/news-updates/netsuite/burn-multiple-metric-capital-efficiency-technology-startups/