margin of safety

Definitions (2)
Popular Terms
1. Accounting: An excess of a company's actual sales revenue over the breakeven sales revenue, expressed usually as a percentage. The greater this margin, the less sensitive the company to any abrupt fall in revenue. Formula: (Actual sales revenue - Breakeven sales revenue) x 100 รท Actual sales revenue.
2. Occupational safety: The maximum amount of exposure to a hazardous substance that produces no measurable ill-effect in test animals, divided by the actual amount of exposure received by the human population.

Use 'margin of safety' in a Sentence

There must always be a regional margin of safety for any business that will allow a certain window of decreased profits without harming viability.
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You must make sure that there is a big margin of safety in your warehouse so that people are not ever in danger.
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The more volatile an economy or market is, the more important it becomes to look for investments that offer a high margin of safety to protect you from sudden changes in price or demand.
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