Margin of safety


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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 ?
The margin of safety is the difference between budgeted sales and the breakeven point.
When one takes into account the wide range in left main bronchial lengths (27-68 mm) then the margin of safety ranges from -13 to +49 mm for our samples of French 32 to French 41 tubes and highlights the need for a careful individual selection of a left tracheobronchial tube for the patient.
Using essentially new equipment to negotiate an obstacle that had taken life before reduced the member's margin of safety below what he needed to live.
With little margin of safety, there often is a steep and painful stock price drop.
Not unexpectedly, its first application is likely to be on either an SUV or minivan, two vehicle types where offering an extra margin of safety can give an OEM a leg up on its competition.
A vaccine could be used to help protect the community immediately at risk and provide a larger margin of safety for health-care personnel.