【A.06.06】What if the sales drop = MOS?

Briefing Note
Reading comprehension is a skill that empowers lifelong learning intelligence for a better self.
The margin of safety..

✅ ..is the difference between a company’s actual or projected sales and its breakeven sales.

✅ ..represents the number of sales that a company can lose before it starts to operate at a loss.


If sales drop by the same amount as the margin of safety..

✅ ..a company would be operating at its breakeven point.

✅ ..means it is neither making a profit nor a loss.

✅ ..the company is barely breaking even with NO profit and NO loss.

✅ ..any further decrease in sales would result in a loss.


It is essential for a company..

✅ ..have a margin of safety that is significantly higher than its expected drop in sales to ensure that it can continue to operate profitably even in a worst-case scenario.

✅ ..should focus on improving its sales and reducing its costs to increase its margin of safety and avoid operating at the breakeven point.

✅ ..necessary to re-evaluate its business strategy and make crucial changes to adapt to the changing market conditions to avoid such a situation in the future.


Here is the video for dynamic comprehension..

Here is the briefing note for reading comprehension..