Margin of safety are the sales beyond Break Even Point. In simple words, this is the amount of sales which generates profits. The soundness of the business is indicated by the margin of safety. A high margin of safety indicates that the Break Even Point is much below the actual sales and even if there is reduction in sales, business will be still in profits whereas a low margin of safety accompanied by high fixed cost and high P/V ration indicates that efforts are required to be made for reducing the fixed cost or increasing sales volume.   _{Your Comment}