What is MARGIN OF SAFETY?

1. In Accounting, this is an amount in excess of a company’s breakeven point in sales revenue by actual sales revenue. A ratioed percentage. The bigger this margin, the less danger to the company by any abrupt fall in revenue. Formula: (Actual sales revenue minus Breakeven sales revenue) x 100 divided by Actual sales revenue. 2. In Occupational safety, this is the maximum amount of hazardous substance exposure that results in no measurable ill effects in test animals, divided by the human population’s actual amount of exposure.

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