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C.A. Dhara (Querist)
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22 October 2010 Can any one explain me the relationship beetween contribution, P/V ratio and margin of safety.?

How they coneect to other?

I am verymuch confused beetween these three? how to apply?

Please if any one had idea pls explain .

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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22 October 2010 P/V ratio nothing but the percentage of contribution on sales, contribution is the sum of profit+ fixed cost, margin of safety is the value of sale in excess of sales which recovere the the fixed cost fully. everything is different calculation

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