Economic Profit Calculator

Accounting profit is revenue minus explicit (out-of-pocket) costs only — what shows up on a P&L statement. Economic profit goes further, also subtracting implicit costs: the value of the next-best alternative use of your time, capital, or resources (opportunity cost).

Anything you gave up to run this venture that doesn't appear as a cash expense — commonly the salary you'd have earned elsewhere, or the return your capital could have earned in a different investment. You estimate this figure yourself; the calculator doesn't derive it for you.

If your accounting profit is positive but smaller than what you gave up (your opportunity cost), you're technically losing value compared to your next-best alternative — the business is 'profitable' on paper but not the best use of your resources.

No — economic profit is an internal decision-making concept (also related to EVA, Economic Value Added), not a standard reported under accounting rules like GAAP or IFRS.