Defensive Interval Ratio Calculator (DIR)
Enter cash, marketable securities, net receivables and daily operating expenses to find out how many days the business can sustain itself without new cash inflows.
Days the business can operate without external financing
- 1
Quick assets
500,000 + 200,000 + 300,000 = 1,000,000 - 2
Daily operating expenses
15,000 - 3
Defensive Interval Ratio
1,000,000 ÷ 15,000 = 66.7Days the company can operate on liquid assets alone without new revenue.
How does this calculator work?
DIR = (Cash + Marketable Securities + Net Receivables) ÷ Daily Operating Expenses. It measures how many days a company can sustain operations without new revenue. ≥ 90 days is strong; 45–90 days adequate; < 30 days is a liquidity warning. Exclude inventory and non-cash charges from both numerator and denominator.
Formula
How this is calculated
The Defensive Interval Ratio (DIR), also known as the Defensive Interval Measure (DIM) or Basic Defense Interval (BDI), answers a critical question: if revenue stopped today, how many days could the company cover its operating costs from liquid assets alone? The numerator — cash, marketable securities and net receivables — represents assets that can be converted to cash quickly (the "quick" or "defensive" assets). The denominator is average daily operating expenses: annual cash operating expenses divided by 365, excluding non-cash charges such as depreciation and amortisation.
A higher DIR is generally better: analysts often consider ≥ 45 days adequate for most businesses and ≥ 90 days strong, although the appropriate threshold varies by industry and business model. Capital-intensive industries with lumpy cash flows (construction, manufacturing) may target higher ratios than asset-light services businesses. A DIR below 30 days is a warning sign of tight liquidity.
Note that the ratio uses net receivables — only those collectible within 90 days. Including long-overdue receivables overstates true liquidity. Also exclude inventory, prepaid expenses and fixed assets from the numerator; they cannot be readily turned to cash. Daily expenses should exclude taxes paid, interest and non-cash charges to reflect true cash burn.
Frequently asked questions
Most analysts consider 45–90 days adequate and ≥ 90 days strong. Below 30 days suggests liquidity risk. The right target depends on industry — a retailer with steady daily sales may need fewer reserves than a project-based firm with lumpy cash flows.
The current ratio compares all current assets to current liabilities, including inventory and prepaid expenses. DIR uses only the most liquid assets (cash, securities, receivables) and compares them to the daily cash burn rate, giving a more conservative, time-based measure of survival.
Exclude depreciation, amortisation and any other non-cash charges — they reduce accounting profit but do not consume cash. Also exclude unusual one-time expenses. Focus on the recurring cash costs of running the business: wages, rent, utilities, cost of goods sold.
Also known as
TG we-Calculate Editorial Team. (2026). Defensive Interval Ratio Calculator (DIR) [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/defensive-interval-ratio-calculator
TG we-Calculate Editorial Team. "Defensive Interval Ratio Calculator (DIR)." TG we-Calculate. 2026. https://we-calculate.com/calculator/defensive-interval-ratio-calculator.
TG we-Calculate Editorial Team, "Defensive Interval Ratio Calculator (DIR)," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/defensive-interval-ratio-calculator
@misc{wecalculate_defensive_interval_ratio_calculator, title = {Defensive Interval Ratio Calculator (DIR)}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/defensive-interval-ratio-calculator}}, year = {2026}, note = {TG we-Calculate} }
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