Economic Profit Calculator
Find out whether a business is truly profitable once the opportunity cost of resources like your own time and capital is taken into account.
Economic profit vs. accounting profit
Accounting profit only subtracts explicit costs, the actual cash a business pays out, like wages, rent, and materials. Economic profit goes a step further by also subtracting implicit costs, the value of opportunities given up, such as the salary an owner could have earned elsewhere or the return their capital could have earned in another investment.
The formula
Accounting Profit = Revenue − Explicit Costs, and Economic Profit = Accounting Profit − Implicit Costs. A positive economic profit means the business is earning more than its next-best alternative use of resources; a negative one means resources could be earning more elsewhere, even if the business shows an accounting profit.
Enter your revenue, explicit costs, and estimated implicit (opportunity) costs to see both figures. This tool is for general economic education and planning, not formal accounting or investment advice.