Defensive Interval Ratio Calculator
The Defensive Interval Ratio Calculator estimates how many days a company can operate using only its liquid assets, without additional cash inflow. Enter liquid assets and daily operating expenses.
Formula
Defensive Interval Ratio = Liquid Assets ÷ Daily Operating Expenses
- Liquid assets typically include cash, marketable securities, and receivables.
- A higher number of days indicates a stronger liquidity buffer.
Rs 900,000 liquid assets, Rs 15,000 daily expenses
Inputs
- Liquid Assets: 900000 Rs
- Daily Operating Expenses: 15000 Rs
900,000 ÷ 15,000 = 60 days of operating cover.
Frequently asked questions
Why measure liquidity in days?
It shows how long the business could keep running on existing liquid assets if revenue suddenly stopped.