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Margin of Safety

Last modified by
on
Jul 24, 2020, 6:28:07 PM
Created by
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Jul 28, 2015, 11:15:23 PM
`"Margin of Safety" = "Projected Sales" - "Breakeven Sales" `
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Accounting Operation Management Margin Safety
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8613c11a-357e-11e5-a3bb-bc764e2038f2

A principle of investing in which an investor only purchases securities when the market price is significantly below its intrinsic value. In other words, when market price is significantly below your estimation of the intrinsic value, the difference is the margin of safety. This difference allows an investment to be made with minimal downside risk.

Resource:

  • Dopson, Lea R., and David K. Hayes. Managerial Accounting for the Hospitality Industry. Hoboken, NJ: Wiley, 2009. Print.
  • "Margin Of Safety Definition | Investopedia." Investopedia. N.p., 03 Nov. 2005. Web. 08 Aug. 2015.
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