The defensive interval ratio is a liquidity measure in days, independent of current liabilities. Longer is safer; many analysts like to see 90 days or more.
How to use the Defensive Interval Ratio Calculator
- Cash and cash equivalents
- Marketable securities
- Accounts receivable
- Annual operating expenses
- Annual non-cash charges
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter cash, marketable securities, receivables, annual operating expenses and non-cash charges (depreciation and amortisation).
Tips
- Check whether rates are quoted annually, semi-annually or per period.
- Bond prices and yields move in opposite directions – a higher yield means a lower price.
- Use the bond’s clean price (without accrued interest) for yield calculations.
- Credit ratios are most useful when tracked over several years.
Common mistakes to avoid
- Confusing the coupon rate with the yield.
- Using the face value instead of the market price.
- Forgetting that callable bonds may be redeemed before maturity.
Inputs explained
| Field | What to enter |
|---|---|
| Cash and cash equivalents | Amount in your currency |
| Marketable securities | Amount in your currency |
| Accounts receivable | Amount in your currency |
| Annual operating expenses | Amount in your currency |
| Annual non-cash charges | Amount in your currency |
What each result means
- Defensive assets = [Cash and cash equivalents] + [Marketable securities] + [Accounts receivable]
- Daily cash expenditure = ([Annual operating expenses] – [Annual non-cash charges])÷365
- Defensive interval ratio = [Defensive assets]÷[Daily cash expenditure]
Example values
How the main result changes when Cash and cash equivalents changes and everything else stays at the example values above:
| Cash and cash equivalents | Defensive interval ratio (days) |
|---|---|
| 150,000 | 94 |
| 225,000 | 103 |
| 300,000 | 113 |
| 375,000 | 122 |
| 450,000 | 131 |
| 600,000 | 150 |
Formula
Current (defensive) assets = cash + marketable securities + accounts receivableDaily cash expenditure = (annual operating expenses − non-cash charges) ÷ 365DIR = defensive assets ÷ daily expenditureWorked example
Inputs — Cash and cash equivalents: $300,000; Marketable securities: $200,000; Accounts receivable: $400,000; Annual operating expenses: $3,200,000; Annual non-cash charges: $280,000.
Results — Defensive assets = $900,000.00; Daily cash expenditure = $8,000.00; Defensive interval ratio = 113 days.
Frequently asked questions
What is a good defensive interval ratio?
Typically 30–90 days or more, depending on the business.
Why exclude non-cash charges?
Depreciation doesn't use cash, so it shouldn't count as spending.
How is it different from the current ratio?
It ignores liabilities and measures days of operation.
What formula does the Defensive Interval Ratio Calculator use?
Current (defensive) assets = cash + marketable securities + accounts receivable.