Register now or log in to join your professional community.
If for some reason all the company's revenues were to suddenly cease, basic Defense interval would help determine the number of days the company can cover its cash expenses with out the aid of additional financing.
It is calculated ( cash+Receivables+Marketable securities)/ ( operating expenses+interest+Income taxes)/365)
Defence Level in Accounting, do you mean "Margin of Safety"?
Margin of Safety in a Cost-Volume-Profit-Analysis, refers to the maximum amount of decrease in sales level, generally expressed in sales volume, before the company suffers operating losses.
Actual Profit - Margin of Safety = Break-Even-Sales
Am I right ???
