AQA GCSE Business · 8132
Paper 2
Revise: Financial Terms and Break-even AnalysisThe margin of safety shows how far sales can fall before the business reaches break-even.
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GCSE Business · key term
The difference between actual or planned sales output and break-even output; it shows how far sales can fall before the business begins making a loss.
Used by AQA and Edexcel
Paper 2
Revise: Financial Terms and Break-even AnalysisThe margin of safety shows how far sales can fall before the business reaches break-even.
Specification 1.3.2 · Paper 1
The difference between actual or budgeted sales and break-even sales. A positive margin shows how far sales can fall before the business makes a loss.
Read the axis scales carefully. Break-even output and margin of safety are measured in units of output, whereas revenue, costs and profit are measured in money.
Label a negative profit calculation as a loss. Do not confuse the horizontal margin of safety with the vertical profit gap.
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The margin of safety compares actual or budgeted sales with break-even sales.