What is the 'Defensive Interval Ratio'
The defensive interval ratio is an efficiency ratio that measures how many days a company can operate without having to access noncurrent (longterm) assets.
The defensive interval ratio (DIR) is calculated as:
DIR = Current Assets / Daily Operational Expenses
Also known as the "Defensive Interval Period".
BREAKING DOWN 'Defensive Interval Ratio'
The DIR is thought by many people to be a better liquidity measure than the quick and current ratios. Because these ratios compare assets to liabilities rather than comparing assets to expenses, the DIR and current/quick ratios would give quite different results if the company had alot of expenses, but no debt.
The DIR is not a replacement to the other ratios, but a complement. As with all financial analysis, a prudent investor will use a basket of different analysis when deciding on whether a company is a good investment.

Current Ratio
The current ratio is a liquidity ratio measuring a company's ... 
Operating Ratio
A ratio that shows the efficiency of a company's management by ... 
Adjustment Interval
The amount of time between interest rate changes to an adjustable ... 
Key Ratio
A mathematical ratio that illustrates and summarizes the current ... 
Activity Ratios
Accounting ratios that measure a firm's ability to convert different ... 
Efficiency Ratio
Ratios that are typically used to analyze how well a company ...

Fundamental Analysis
Efficiency Ratio
There are many types of efficiency ratios, but all measure how well a company utilizes its resources to make a profit. Business managers use these ratios to determine how well they are operating ... 
Investing Basics
Analyze Investments Quickly With Ratios
Make informed decisions about your investments with these easy equations. 
Investing
Ratio Analysis
Ratio analysis is the use of quantitative analysis of financial information in a company’s financial statements. The analysis is done by comparing line items in a company’s financial ... 
Investing Basics
Do Your Investments Have ShortTerm Health?
If a company is strong enough to survive tough times, it is more likely to provide longterm value. 
Trading Strategies
Financial Ratios to Spot Companies Headed for Bankruptcy
Obtain information about specific financial ratios investors should monitor to get early warnings about companies potentially headed for bankruptcy. 
Economics
Calculating Operating Ratio
An operating ratio compares a companyâ€™s operating expenses to its net sales. 
Charts & Patterns
Advantages Of DataBased Intraday Charts
We take a look at these chart intervals and how we can use them to our advantage. 
Stock Analysis
Expedia and More Big Movers on the Nasdaq on September 21, 2012
This morning, the Nasdaq has moved little, the S&P 500 has decreased 0.3% and the Dow has been relatively flat. The recent surge in popularity of technological stocks has launched the Nasdaq ... 
Stock Analysis
Sony Corporation and More Big Movers in Consumer Cyclical on September 17, 2012
The market is having a bad day so far. The Nasdaq is trading down 0.2%; the S&P 500 is down 0.2%; and the Dow has slipped 0.2%. The consumer cyclical sector is a category of stocks that relies ... 
Stock Analysis
American Capital Agency Corp. and Other Real Estate Operations Stocks Making Big Moves
The market is currently up, with the Nasdaq moving up 1%, the S&P 500 rising 0.5% and the Dow increasing 0.6%. The Real Estate Operations sector (IYR) is relatively unchanged on a good day ...

How do stock dividends affect the retained earnings account?
Understand the difference between financial ratio analysis and accounting ratio analysis. Learn why ratio analysis is important ... Read Answer >> 
What is the difference between efficiency ratios and profitability ratios?
Learn about efficiency and profitability ratios, what these ratios measure and the main difference between efficiency and ... Read Answer >> 
How do I use ratios to perform a financial analysis?
Learn which ratios are used in fundamental analysis. Find out how analysts measure company performance and financial health ... Read Answer >> 
Which financial ratios are considered to be efficiency ratios?
Learn about efficiency ratios, what financial ratios are considered efficiency ratios, and how to calculate three different ... Read Answer >> 
What is the formula for calculating the current ratio?
Find out how to calculate the current ratio and what that result can tell you about a potential investment. Read Answer >> 
What are the main differences between the current ratio and the quick ratio?
Find out how the quick ratio and the current ratio can offer different views on a company's ability to pay off liabilities. Read Answer >>