Margin of safety


Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia.

Margin of safety

With respect to working capital management, the difference between (1) the amount of long-term financing and (2) the sum of fixed assets and the permanent component of current assets.

Margin of Safety

In business, the amount by which sales or other revenue can fall before it reaches the breakeven point. That is, the margin of safety is how much worse a company can do before it ceases to be profitable. For example, if a company's breakeven point is $200,000 per year, and it is currently producing $300,000, its margin of safety is $100,000. This is also called the safety margin.
References in periodicals archive ?
Legal covenants are adequate for a regional utility such as TRA, but the cost of service methodology employed provides little margin of safety.
The airport administration wants to do it for what they claim to be corporate jets that need an extra margin of safety on a fully-loaded takeoff,'' said Little.
Moreover, these data suggest that blood-lead concentrations currently deemed "acceptable" for young children by the Centers for Disease Control "offer little or no margin of safety," says study director John F.
This is another important milestone for Talecris Biotherapeutics, and particularly for our outstanding pathogen safety team, in demonstrating our relentless efforts to produce protein therapies with the highest possible margin of safety," said Steve Petteway, Ph.
Under California law, CCRI's supporters must submit the signatures of just under 700,000 registered voters to put it on the ballot, with a margin of safety above that number to make up for the inevitable invalid signatures.
Previously, policymakers had thought the current ozone standard provided a margin of safety even to those considered at increased risk, including people with emphysema, asthma and other chronic respiratory problems.
A second study conducted by Kerin, suggests the Essure procedure can be performed on women suffering from serious health conditions with a high margin of safety eliminating the risk of complications that commonly follow laparoscopic tubal ligation carried out under general anesthesia.
3 million provides bondholders a limited margin of safety over the short-term.
While financial commitments are currently being met, the rating indicates that significant credit risk is present with a limited margin of safety remaining and capacity for continued payment is contingent upon a sustained, favorable business and economic environment.