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# The Margin of Safety Calculator

If you want to find the sales amount that transcends your business's breakeven point, then the margin of the safety calculator is made for you.

The variation between the breakeven point and the actual or estimated sales is known as the MOS (Margin of Safety). Moreover, Benjamin Graham and David Dodd invented it to find the difference between an investment's essential/intrinsic value and its value in the market.

The breakeven point is the point where total expenses in business and total income from business are equivalent. In simple words, if the company has made no profit and no loss, then it is called the breakeven point or is also known as breakeven sales.

## Formula of the Margin of Safety Calculator

You can find the MOS in various ways like percentage, ratio, financial/monetary terms, or units. We will discuss and narrate all possible ways here:

1. MOS in dollars

MOS = current sales – breakeven point

2. MOS ratio

MOS (ratio) = current sales – breakeven point / current sales

3. MOS in percentage

MOS (%) = [current sales – breakeven point / current sales] * 100

4. MOS in units

MOS (units) = current sales – breakeven point / sales price per unit

Note:

To know about EBIT, you can use our EBIT Calculator.

### Example

For a more clear and precise understanding, let's solve the example below.

Suppose John’s International made an $80,000 sale in February 2021 and$50,000 is the breakeven sales. Find the margin of safety by using the above formulas.

Given data

Current sales = $80,000 Breakeven point/sales =$50,000

To Find

MOS (Margin Of Safety) = ?

Solution

1. MOS in dollars

MOS = current sales – breakeven point= $80,000 -$50,000 = \$30,000

2. MOS ratio

MOS (ratio) = current sales – breakeven point / current sales= 80,000 - 50,000 / 80,000 = 0.375

3. MOS in percentage

MOS (%) = [current sales – breakeven point / current sales] * 100 = 0.375*100 = 37.5%

### How to use the Margin of Safety Calculator?

The steps to use the margin of safety calculator are as follows:

Step 1: Enter the value of current (estimated) sales in the first required input.

Step 2: Enter the value of breakeven sales in the second required input.

Step 3: The calculator will automatically display an answer on the screen.

### Calculator use

You can use our Margin of Safety Calculator by just simply adding the required values; after that, our free online calculator will display the answer on the screen.