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What is the formula for calculating Margin of Safety?

17. What is the formula for calculating Margin of Safety?

  1. PV Ratio / Profit
  2. Profit / PV Ratio
  3. Profit / Sales
  4. Contribution / Fixed Cost

Answer: B) Profit / PV Ratio

Explanation:

The term margin of safety is utilized in bookkeeping and putting resources into alluding to the degree to which business, project, or speculation is protected from misfortunes. This article gives an itemized portrayal of how to ascertain the edge of wellbeing and show up at the edge of security proportion, the edge of security rate, and the edge of wellbeing deals in dollars and units.

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