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Definition

margin of safety (MoS)

In engineering, a margin of safety (MoS) is a metric that compares a structure’s functional strength to its minimal requirement for strength. For example, if the margin is 0, the structure can not take any additional load or it will fail. If the MoS is negative, the part will fail before reaching its design load. The term MoS is often used in design specifications.

In finance, a margin of safety is the positive difference between what an investor pays for an item and the item's intrinsic value. To qualify as a margin of safety, the market price must be significantly below the intrinsic value. 

In statistics, the margin of error is a measure of the random variation in a survey's results. It expresses the maximum expected difference between a parameter and an estimate of that parameter as calculated by sampling.

See also: factor of safety (FoS)

This was last updated in July 2018
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