Margin of Safety Calculator
Quantify your downside protection. Enter your intrinsic value estimate and the current market price to get the investing margin of safety. Optionally add revenue and break-even revenue for the accounting margin of safety.
Discount of market price below your estimated intrinsic value
- 1
Dollar margin of safety
150 − 100 = 50 - 2
MOS ratio
50 ÷ 150 = 0.3333 - 3
Margin of safety
0.3333 × 100 = 33.3Percentage discount of market price below your intrinsic value estimate.
How does this calculator work?
Investing margin of safety = (Intrinsic Value − Market Price) ÷ Intrinsic Value × 100. A larger gap means more protection if your valuation is wrong. Value investors typically require 25–50% MOS before buying. Enter intrinsic value and market price to see how much cushion you have.
Formula
How this is calculated
The margin of safety is a core concept in value investing, popularised by Benjamin Graham in Security Analysis (1934) and The Intelligent Investor (1949). It measures how far the market price is below your estimate of intrinsic value — the larger the gap, the more room for error in your valuation and the more protected you are if the business performs below expectations. A common rule of thumb is to require at least a 25–33% margin of safety before buying.
Intrinsic value is subjective — it must be estimated, typically through a discounted cash-flow (DCF) model or a comparison to earnings multiples. The calculator takes whatever value you enter and computes the percentage discount: MOS % = (Intrinsic Value − Market Price) ÷ Intrinsic Value × 100. If the market price exceeds your intrinsic value estimate, the margin of safety is negative and the stock is overvalued by your measure.
The accounting margin of safety measures how much actual revenue can fall before the business stops covering its costs: Accounting MOS = (Actual Revenue − Break-Even Revenue) ÷ Actual Revenue × 100. A business with £500,000 in sales and a £350,000 break-even point has a 30% accounting margin of safety — sales could drop by 30% before the company starts losing money.
Frequently asked questions
Graham and Buffett have historically required 25–50% depending on the certainty of the valuation. For high-quality, predictable businesses a 20–25% MOS may be sufficient; for cyclical or speculative companies many value investors demand 40% or more to compensate for valuation uncertainty.
The most common method is a discounted cash flow (DCF) analysis projecting free cash flows and discounting them at a required rate of return. Simpler approaches include capitalising normalised earnings (P/E multiples), book value or asset-based valuations. Intrinsic value is always an estimate — the margin of safety exists to absorb that uncertainty.
The investing MOS compares a stock's market price to its estimated fair value — it protects against overpaying. The accounting MOS compares actual sales to break-even sales — it measures how much revenue can fall before the business turns loss-making. Both are buffer zones against error or adverse conditions.
TG we-Calculate Editorial Team. (2026). Margin of Safety Calculator [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/margin-of-safety-calculator
TG we-Calculate Editorial Team. "Margin of Safety Calculator." TG we-Calculate. 2026. https://we-calculate.com/calculator/margin-of-safety-calculator.
TG we-Calculate Editorial Team, "Margin of Safety Calculator," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/margin-of-safety-calculator
@misc{wecalculate_margin_of_safety_calculator, title = {Margin of Safety Calculator}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/margin-of-safety-calculator}}, year = {2026}, note = {TG we-Calculate} }
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