interval measure

Definition

A calculation to measure the approximate number of days a company could operate simply on the cash it currently has on hand. It is equal to quick assets divided by daily operating expenses, and the value it returns is the average number of days that company could use those assets to meet all its expenses. The interval measure is similar to both the current ratio and the quick ratio, in that it gives an idea of how easily a company could fulfill its obligations. The interval measure is sometimes preferred to the other ratios because it returns an approximation of the actual number of days, as opposed to the other ratios, which just return a value that indicates the ease of making the payments.

Use interval measure in a sentence

You should try and break down the interval measure so that you can find new ways for you to proceed.

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The interval measure was a good calculation to figure out and I wanted to know how to handle the situation.

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They weren't sure what was causing this downturn in the economy and a lack of demand for their products, but their interval measure was 6 months, so they could survive until then.

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