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15-12-1
Margin of Safety
15-12 Margin of Safety
Margin of Safety lets you calculate how much sales can be reduced before losses are
incurred.
Margin of Safety Fields
The following fields appear on the Margin of Safety calculation page.
Field Description
SAL Amount obtained from sales
SBE Break-even sales (amount that must be obtained from sales to break even)
MOS Margin of safety (portion of sales amount above break-even point)
k
Example
What is the margin of safety ([MOS]) when the sales amount ([SAL]) is $1,200,000 and the
break-even sales amount ([SBE]) is $1,000,000?
• You can calculate the break-even sales amount ([SBE]) using Break-Even Point (page
15-11-1).
• You can also calculate the sales amount ([SAL]) or break-even sales amount ([SBE]) by
inputting the other two values and tapping the button for the result you want.
Calculation Formulas
SAL
MOS =
SAL – SBE
1 – MOS
SAL =
SAL = SAL × (1 – MOS)
SBE
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