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Margin Of Safety Calculator

Work out margin of safety instantly with clear inputs, formula shown and shareable results.

About Margin Of Safety Calculator

The margin of safety is the discount of price to estimated intrinsic value, and it exists to absorb errors in that estimate. Setting a required margin converts a valuation into a disciplined buying price.

Formula

Margin of safety

MOS = (Intrinsic value - price)/Intrinsic value; buy below = value × (1 - required MOS)

Worked example

With the default values below, Margin Of Safety Calculator returns Current Margin Of Safety of 28.00%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Estimated Intrinsic Valueminimum 0
1,000
Current Market Priceminimum 0
720
Margin Of Safety You Wantaccepts 0–80 %
30 %

Results

Current Margin Of Safety
28.00%
Buy Below This Price
$700.00
Discount To Intrinsic Value
$280.00
Assessment
Price is above your buying threshold

Step by step

  1. 1Values used
  2. 2Margin of safety
  3. 3Current Margin Of Safety= 28.00
  4. 4Buy Below This Price= 700.00
  5. 5Discount To Intrinsic Value= 280.00
  6. 6Assessment= Price is above your buying threshold

Assumptions and limits

  • The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.

Frequently Asked Questions

How large should the margin be?

The less predictable the business, the wider it should be — commonly 20-50% for equities.

Does a margin of safety guarantee a profit?

No. It reduces the cost of being wrong; it does not remove the possibility.

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