Defensive Interval Ratio

View Financial Glossary Index

Definition

Defensive Interval Ratio is an estimate of how many days a company can continue its operations without using long-term assets. It is a measurement of liquidity and can better tell investors if the company can meet its daily financial obligations.

Investors find the ratio useful when complemented with current ratio and quick ratio.

Formula

= Average Total Current Assets (TTM) / Total Operating Expense (TTM)