The Margin of Safety Ratio Is Equal to the Margin

question 68

True/False

The margin of safety ratio is equal to the margin of safety in dollars divided by the actual or (expected) sales.

---

Definitions:

Jointly Controlled Entity

An entity that is operated and controlled through a contractual arrangement between two or more parties who have joint control.

AASB 11

An accounting standard issued by the Australian Accounting Standards Board that outlines the reporting requirements for parties involved in joint arrangements.

Joint Operation

A business activity owned and managed by two or more parties that share control, resources, and obligations directly.

Jointly Controlled Operations

A collaboration where the entities involved do not create a separate entity but rather operate under a joint agreement, sharing control, and responsibilities.