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What is margin of safety?
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Answer / harsha
THIS TERM IS BASICALLY USED IN MANAGMENT ACCOUNTING MARGIN
OF SAFTY IS NOTHING BUT THE DIFFERENCE BETWEEN ACTAUL SALES
AND THE SALES AT BREAK EVEN POINT.GRADUALY HIGHER THE
MARGIN OF SAFTY THE BETTER IS FOR ORGANISTAION.
MAGIN OF SAFTY=ACTUAL SALES-BREAK EVEN SALES OR
PROFIT/PVRATIO
MARGIN OF SAFTY RATIO=EXPECTED SALES-BREAK EVEN SALES/BREAK
EVEN SALES
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Answer / naveengokarapu@gmail.com
The Margin of Safety is the margin, by which the return on
assets exceeds the average interest rate on fixed term
securities.
| Is This Answer Correct ? | 2 Yes | 2 No |
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