Final answer:
The 'defensive-interval ratio' measures a company's ability to cover short-term liabilities with its liquid assets.
Step-by-step explanation:
The 'defensive-interval ratio' is a measure used in business and finance to assess a company's ability to cover its short-term liabilities with its liquid assets. It is expressed as a formula:
Defensive-Interval Ratio = Liquid Assets / Daily Expenses
The liquid assets include cash, marketable securities, and accounts receivable, while the daily expenses represent the average daily costs of running the business. This ratio helps evaluate a company's liquidity and its ability to maintain operations in the short term.