# Margin of Safety Calculator (Break-Even)

URL: https://speedycalculator.com/calculators/finance/margin-of-safety/
Last updated: 2026-10-25

> The margin of safety calculator measures how far sales can fall before a business reaches its break-even point – in revenue, units and as a percentage of current sales.

## Inputs

- Current (estimated) sales
- Break-even sales
- Selling price per unit

## Results

- Margin of safety
- Margin of safety percentage
- Margin of safety ratio
- Margin of safety in units

## Formula

```
Margin of safety = current sales − break-even sales
Margin of safety ratio = margin of safety ÷ current sales
In units = margin of safety ÷ price per unit
```

## Explanation

A large margin of safety means a business can absorb a drop in sales without making a loss. It is a key risk measure in cost-volume-profit analysis and budgeting.

### How to use the Margin of Safety Calculator

- **Current (estimated) sales**
- **Break-even sales**
- **Selling price per unit**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter current (or budgeted) sales and break-even sales, and the selling price per unit.

### Tips

- Take figures from the same financial statements and the same fiscal year.
- Compare ratios with companies in the same industry, not across industries.
- Use several valuation measures together; no single ratio tells the whole story.
- Market prices change every second – refresh the share price before you rely on a result.

### Common mistakes to avoid

- Mixing per-share figures with company totals.
- Using trailing earnings for one company and forward earnings for another.
- Forgetting dilution from options and convertible securities.

### Inputs explained

FieldWhat to enterCurrent (estimated) salesAmount in your currencyBreak-even salesAmount in your currencySelling price per unitAmount in your currency

### What each result means

- **Margin of safety** = [Current (estimated) sales] - [Break-even sales]
- **Margin of safety percentage** = ([Current (estimated) sales] - [Break-even sales])÷[Current (estimated) sales]×100
- **Margin of safety ratio** = ([Current (estimated) sales] - [Break-even sales])÷[Current (estimated) sales]
- **Margin of safety in units** = ([Current (estimated) sales] - [Break-even sales])÷[Selling price per unit]

### Example values

How the main result changes when **Current** changes and everything else stays at the example values above:

Current (estimated) salesMargin of safety250,000-100,000375,00025,000500,000150,000625,000275,000750,000400,0001,000,000650,000

## Worked example

Inputs — Current (estimated) sales: $500,000; Break-even sales: $350,000; Selling price per unit: $25.

Results — **Margin of safety = $150,000.00**; Margin of safety percentage = 30 %; Margin of safety ratio = 0.3; Margin of safety in units = 6,000.

## FAQ

**What is a good margin of safety?**
Above 20–30% gives a comfortable cushion.

**What does a negative margin of safety mean?**
Sales are below break-even – the business is making a loss.

**Is this the same as Graham's margin of safety?**
No – in investing it means buying below intrinsic value.

**What formula does the Margin of Safety Calculator use?**
Margin of safety = current sales − break-even sales.