How much sales can fall before you make a loss.
MS = (V − Ve) ÷ V
What each letter means
- V: Sales
- Ve: Break-even sales
An example
With V = €60,000, Ve = €32,727: Margin of safety = 45.45%.
How much sales can fall before you make a loss.
With V = €60,000, Ve = €32,727: Margin of safety = 45.45%.