## \$show=home

 Science ClassesBasic SciencesComputer Science

 Personal Finance Money MakingInvestment  Finance Data AnalysisCorporate Finance Finance ServicesPublic FinanceTaxation

## \$show=home

"Thank you sir you did a good job for students through Svtuition. I have learn many things"

S.U. Rahman

"First time I have so happy to find Svtuition I spent a lot of time searching for my problem now I have finally understood the concept at Svtuition"

Anonymous

"All doubts clear sir.Svtuition is a very good teacher.thanks"

Sathyam Guha

"Sir I am learning through your website and I am really grateful to you for taking out your time to teach us in Svtuition."

Himansh

"Svtuition is very usefull to me ....today i have learn great things at Svtuition....very usefull tips provide for me.....today i have to start my own learning experience through this website.......Thanks bro....God Bless U. "

Jeevan Kumar

"Nice👌 and informative Site, Keep doing the good work "

Divyanshu

# Learn Financial Freedom Step by Step

Margin of Safety is tool for buying the share from stock market. If you believe in value investing, you have to buy the share when its market price is low than its real price. For Example, ABC company is good company and its real price of one share is Rs. 1000 but its market price is Rs. 800, now marginal of safety will be Rs. 200. So, it should be bought. Now, market price, you will get automatic from market but how to calculate same share's real value

Real Value is called intrinsic Value.

Investor must

(A) Buy Shares of A Company = When = Market Value <  Intrinsic Value

(B) Sell Shares of A Company = When =  Market Value > Intrinsic Value

Earning Capacity Value

Intrinsic value means ability of share to give you high return on your investment in very less period. Because your buying of share is your investment and it is your asset. If it will buy back its cost from dividend, it will have high intrinsic value of stock.

We will calculate the present value of future dividend for finding intrinsic value of stock

For calculating dividend, you can see past dividend data or you can

Do one great step

Buy valuable shares 1 after every month and collect for 5 years and no go to your DEMAT account's portfolio and check which share has given high dividend trend in past 5 and cover its cost and if its market value is less, you can calculate margin of safety and invest in them.

Liquidation method of calculation real value of share

See current balance sheet

Find net worth =

Total assets - total outside liabilities or loan

Real value per share= net worth/ no. Of share

Now if it Rs. 100

Market value is Rs. 80

You margin of safety= 100- 80

If today company liquidate, you get Rs 20

Profit due to margin of safety.

Benefit of Margin of Safety

With this you can catch under value share  if you there is high margin of safety as per your calculation.

## Ashok Kumar's Contents\$type=blogging\$show=https://www.svtuition.com/p/ashok-kumar.html\$hide=author

Name

ltr
item
Svtuition: What is Margin of Safety
What is Margin of Safety