2 min read
Definition
The defensive interval ratio estimates how many days a business could keep operating using only its liquid assets, without any further income. It divides liquid assets by daily operating expenses, giving a survival horizon in days — a liquidity-focused cousin of cash runway.
In plain terms
If your liquid assets would cover 90 days of running costs with no money coming in, your defensive interval is 90 days. It is a stark measure of how long you could hold out in a crisis, useful for stress-testing resilience.
Why it matters
The defensive interval complements runway as a resilience gauge. See cash runway and cash ratio.
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