Margin of Safety Calculator
Find how far your sales can fall before you reach break-even, in units, revenue and percent.
Quick answer
Margin of safety is how far sales can fall before reaching break-even: actual sales - break-even sales. As a percentage it is (actual - break-even) / actual, with break-even = fixed costs / contribution margin.
Margin of Safety Calculator
In the basis chosen above.
In the same basis as your sales above.
Margin of Safety (%)
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Margin of Safety (units)
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Margin of Safety (revenue)
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Break-even Sales
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Operating Profit at These Sales
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If Sales Decline
| Sales change | Sales level | Margin of safety | Margin (%) | Operating profit (₹) |
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Assumptions & method
- Margin of safety = actual (or budgeted) sales − break-even sales. Margin % = margin of safety ÷ actual sales.
- Break-even units = fixed costs ÷ (price − variable cost per unit). Break-even revenue = break-even units × price.
- With a known price, units and revenue are converted using that price: revenue = units × price.
- Operating profit = (price − variable cost) × units − fixed costs, shown only when price and costs are entered. Price and costs are held constant in every scenario.
- Not included: taxes, interest, a changing sales mix, step-fixed costs and discounts. The margin is a single-product, single-period measure.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
What is the margin of safety?
The margin of safety measures the cushion between your sales and your break-even point. If you sell 10,000 units and break even at 6,000, your cushion is 4,000 units, or 40% of sales: demand could drop by that much before profit turns into loss. It is a simple risk indicator used in budgeting, pricing and investment decisions. Enter your sales in revenue or units, then either supply a known break-even figure or let the calculator derive it from price, variable cost and fixed costs. A table shows what happens to the buffer and profit if sales decline.