DEFINITION of 'Defensive Interval Ratio'
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".
INVESTOPEDIA EXPLAINS '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.

Quick Ratio
An indicator of a company’s shortterm liquidity. The quick ratio ... 
Working Ratio
A ratio used to measure a company's ability to recover operating ... 
Expense
1. The economic costs that a business incurs through its operations ... 
Current Liabilities
A company's debts or obligations that are due within one year. ... 
Current Assets
1. A balance sheet account that represents the value of all assets ... 
Current Ratio
A liquidity ratio that measures a company's ability to pay shortterm ...

What Book Value Of Equity Per Share (BVPS) ratio indicates a buy signal?
Book value of equity per share (BVPS) is a ratio used in fundamental analysis to compare the amount of a company's shareholders' ... Read Full Answer >> 
What is the effective interest method of amortization?
The effective interest method is an accounting practice used for discounting a bond. This method is used for bonds sold at ... Read Full Answer >> 
What does an unfavorable variance indicate to management?
In managerial accounting, an unfavorable variance is discovered when a company's management performs a comparison between ... Read Full Answer >> 
Is there a way to include intangible assets in booktomarket ratio calculations?
The booktomarket ratio is used in fundamental analysis to identify whether a company's securities are overvalued or undervalued. ... Read Full Answer >> 
When is market to market accounting performed?
Mark to market accounting is used for substantially all investments or financial instruments held on a corporation's balance ... Read Full Answer >> 
What types of assets may be considered off balance sheet (OBS)?
Though the offbalancesheet accounting method can be used in a number of scenarios, this accounting practice is especially ... Read Full Answer >>

Fundamental Analysis
Ratio Analysis Tutorial
If you don't know how to evaluate a company's present performance and its possible future performance, you need to learn how to analyze ratios. 
Investing Basics
Analyze Investments Quickly With Ratios
Make informed decisions about your investments with these easy equations. 
Fundamental Analysis
Dynamic Current Ratio: What It Is And How To Use It
Learn why this ratio may be a good alternative to the current, cash and quick ratios. 
Markets
Operating Performance Ratios
Learn about the fixedasset turnover, sales/revenue per employee, operating cycle and dividend payout ratio. 
Markets
Liquidity Measurement Ratios
Learn about the current ratio, quick ratio, cash ratio and cash conversion cycle. 
Markets
Profitability Indicator Ratios
Learn about profit margin analysis, effective tax rate, return on assets, return on equity and return on capital employed. 
Economics
Calculating Net Realizable Value
An asset’s net realizable value is the amount a company should expect to receive once it sells or disposes of that asset, minus costs from its disposal. 
Entrepreneurship
MLPs: Is Now the Right Time to Invest?
Here's what you need to know about MLPs, those undertheradar investment vehicles. 
Investing Basics
Calculating Unlevered Free Cash Flow
Unlevered free cash flow (UFCF) is the free cash flow of a business before interest payments. 
Economics
What are Capital Goods?
Capital goods are assets with a useful life of more than one year that are used for the production of income.