What is the safety of margin?

Answer Posted / reni mathew

In simpler words, if a company 'X' has interest charges of
Rs 10 per annum, it should make Rs 50 as profit before tax
for its bonds to qualify as investment grade instruments.
The excess of profit after paying interest provides a sense
of comfort for investors. And this is called the 'margin of
safety.' This acts as a protection to investors against any
loss in the event of some future decline in net
profits.safety of margin is also called margin of safety.

Is This Answer Correct ?    0 Yes 2 No



Post New Answer       View All Answers


Please Help Members By Posting Answers For Below Questions

What is difference between cash flow and funds flow?

1855


How will we calculate T1, T2 capital in CRR(Cash Reserve Ratio)?

2577


where is suspense entry is entered in tally erp9

1110


wat is the fundamental analysys& technical analasys?and wat is the difference bewween fundamental analysys&technical analasys?

1736


please explain the uses of internate protocol address(ip add)?

1834






You are required to show the effect of each of the following changes on profit and Break-Even-Volume from the information given below: Sales 50,000 units Rs. 5.00 per unit Variable cost Rs. 3.00 per unit Fixed cost Rs. 70,000 Changes: (i) Price changes by 20%. (ii) Volume decreases to 40,000 units. (iii) Variable cost increases to Rs 3.50 per unit. (iv) Fixed cost decreases by 10%.

1967


What problems might be encountered if there were no accounting standards?

2621


How Frequently shall a company file the service tax returns and how frequently shall a company pay the service tax to the Government ?

1578


How Are The Balance Sheet And Income Statement Connected?

841


Being BE student why you want to join bank?

2023


am attend to bank exam(iob)pls send model questions

1755


You use the accounts approach for parallel valuation in a new G/L system. If you used the ledger approach instead. Which objects would be different? ( any 3 answer) Chart of accounts Financial statement version Depreciation areas Asset classes Leading ledger

3008


I want to become CFA so kindly provide me all information regarding this like fees structure,colleges in mumbai,duration etc.

1438


your parents have lent you $20,000 to buy a car and have told you to pay it back whenever you like in conceptual framework

1533


EXPAND___________NAA

1602