Work out margin of safety instantly with clear inputs, formula shown and shareable results.
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.
Margin of safety
MOS = (Intrinsic value - price)/Intrinsic value; buy below = value × (1 - required MOS)
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.
The less predictable the business, the wider it should be — commonly 20-50% for equities.
No. It reduces the cost of being wrong; it does not remove the possibility.