Defensive Interval Ratio Calculator

Calculate how long your business can sustain itself using current assets.

Current Assets

Average Daily Expenditure

Result

What is the Defensive Interval Ratio?

The Defensive Interval Ratio measures how long a company can use its liquid assets to cover its daily operating expenses. It's a key indicator of a company's short-term financial health and liquidity.

Formula for Defensive Interval Ratio

The formula for calculating the Defensive Interval Ratio is:

Defensive Interval Ratio = Current Assets / Daily Operating Expenses

Where:

  • Current Assets: Cash, marketable securities, and receivables.
  • Daily Operating Expenses: (Annual Operating Expenses - Non-cash Charges) / 365.

Example Calculation

If your current assets total $230,000 and your daily expenditure is $2,191.78, then the Defensive Interval Ratio is:

Defensive Interval Ratio = 230,000 / 2,191.78 = 105 Days

This means the business can sustain itself for approximately 105 days using its current assets.