Defensive Interval Ratio Calculator

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Includes cash on hand plus demand deposits and short-term instruments with maturities of 90 days or less.
USD
Short-term investments that can be liquidated quickly, such as Treasury bills, commercial paper, and money-market funds.
USD
Trade receivables net of any allowance for doubtful accounts. Use net (not gross) receivables.
USD
Total cash and non-cash operating expenses for the year, such as cost of goods sold plus operating expenses. Exclude interest and taxes unless you want a broader coverage measure.
USD
Depreciation, amortisation, depletion, stock-based compensation, and any other expenses recognised without a cash outflow. These are subtracted because they do not consume liquid assets.
USD
Most analysts use 365 calendar days. Some financial models and bond markets use a 360-day convention.
Defensive Interval RatioAdequate liquidity buffer
160days

Days the company can operate on liquid assets without external income

Total defensive assets32,000,000USD
Daily cash burn200,000USD/day
Cash-only coverage50days
Cash + securities coverage75days
160 days
Thin<30Moderate30-90Adequate90-180Strong180+

DIR of 160.0 days is a adequate liquidity buffer.

  • Daily cash burn is approximately $200,000 per day (annual cash operating expenses divided by the days in the year).
  • Without accounts receivable, coverage falls to 75.0 days (cash + securities) and 50.0 days (cash only), highlighting how much the DIR depends on receivables collection.
  • A DIR above 30 days is generally considered a minimum safe threshold; many analysts look for 90 or more days in capital-light businesses.
  • Compare DIR over multiple periods to spot trends: a declining ratio may signal that the liquid asset base is eroding faster than expenses are falling.

Next stepCross-check DIR with the current ratio and quick ratio for a fuller liquidity picture, and review accounts-receivable ageing to confirm that receivables will convert to cash within the coverage window.

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