Accounting Dictionary
Margin of Safety
The margin of safety is the amount sales can decline before the business starts losing money.
ABC Company has to sell 2000 units to break even. It is currently selling 2450 units. The margin of safety is 450 units (2450 – 2000). If they sold 450 units less, they would still not lose money.
https://accounting.uworld.com/cpa-review/lc/accounting-dictionary/term/margin-of-safety/
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