Margin of safety ratio = margin of safety/sales revenue

Contribution of margin safety x margin of safety

First you need to find the break even sales.

Break even sales = fixed expenses/ CM ratio

Break even sales = 3600/.24 = 15,000

Then find the margin of safety dollars.

margin of safety dollars = budgeted sales - break even sales

margin of satefy dollars = 200,000 - 15,000 = 185,000

Then you can find the margin of safety percent

Margin of safety percent = margin of safety dollars/ budgeted sales dollars

margin of safey percent = 185,000/200,000 = 92.5%

total sales - breakeven= marginal of safety

Margin of safety is the difference between the intrinsic value of a stock and its market price. To have a margin of safety, one must manage one's financial needs thriftily.