margin of safety
Definition
The percentage by which incoming revenue exceeds the total of expenses and liabilities. Tracking this percentage is useful for monitoring profitability, for determining when to cut costs, and for determining the ability of the company to adjust to negative unforeseen circumstances.
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Investing Tips
The 3 Most Timeless Investment Principles (1 of 3)Always Invest with a Margin of Safety: Margin of safety is the principle of buying a security at a significant discount to its intrinsic value, which is thought to not only provide high-return opportu ... Read more
Additional Tip(s)
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