How to Use Defensive Interval Ratio Calculator
The Defensive Interval Ratio Calculator turns balance-sheet and income-statement inputs into a days-of-runway figure.
- Enter Cash & Equivalents — Most liquid bucket.
- Enter Marketable Securities — Short-term investable assets.
- Enter Accounts Receivable — Add only if you expect collection within the runway window.
- Enter Annual Operating Expenses — From the income statement.
- Enter Non-Cash Expenses — Depreciation and amortisation typically included.
- Choose a currency for display.
- Read the Result — The Defensive Interval Ratio Calculator outputs DIR (in days), the total liquid assets, and the daily cash burn.
Formula & Theory — Defensive Interval Ratio Calculator
The Defensive Interval Ratio Calculator uses the standard liquidity-stress formula:
Liquid Assets = Cash + Securities + Receivables
Daily Cash Opex = (Annual Opex − Non-Cash Expenses) / 365
Defensive Interval = Liquid Assets / Daily Cash Opex| Symbol | Meaning |
|---|---|
| Cash | Cash and equivalents |
| Sec | Marketable securities |
| AR | Accounts receivable |
| Opex | Total annual operating expense |
| NCE | Non-cash items (e.g. D&A) |
A conservative version excludes accounts receivable, assuming customers stop paying during the stress scenario. A very aggressive version includes inventory, but this is rare because inventory liquidation usually destroys value.
DIR complements the current ratio and quick ratio by translating liquidity into a tangible, time-based figure that operations teams and lenders can both understand.
Use Cases for Defensive Interval Ratio Calculator
- Crisis planning — Boards and CFOs stress-test how long the firm can survive a revenue stop.
- Startup runway — Founders compute remaining runway and decide when to raise next round.
- Credit underwriting — Lenders use DIR to gauge how quickly liquidity could collapse.
- Internal liquidity targets — Treasury sets minimum days-of-runway thresholds tied to risk appetite.
- Education — Demonstrates how to convert ratios into intuitive day-count metrics.
The Defensive Interval Ratio Calculator makes a complex liquidity question concrete: how many days can we last?