Suppose a class 12th student need 33 marks
to pass a paper.
If student get exactly 33 marks then he will be pass.
These 33 marks are called Break-Even-Point Marks.
If student get marks above 33 then such excess
marks shall be safety marks for him hence shall be called Margin of
Safety Marks (i.e. bonus marks in lay man language)
Similarly Margin of Safety means Sales above
Break-Even Point Sales. Profit is ZERO at BEP Sales. Company makes profit only
when margin of safety sales occurs.