Organizations that have a low margin of safety have an increased risk of loss.

Question

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When an organization has a low margin of safety, it means that its actual sales or revenue are closer to its break-even point. This increases the risk of loss, as any unexpected expenses or downturn in sales can push the organization into a loss or financial distress. Therefore, organizations with a low margin of safety should take necessary measures to increase their profitability and reduce the risk of failure.

Organizations That Have a Low Margin of Safety Have an Increased