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  1. Profit is one of the most widely watched financial metrics in evaluating the financial health of a company. It is the financial gain or revenue generated from any business or investment activity in excess of any expenses, taxes, and any other costs. However, economic profits and accounting profits are two types of profits. Economic profit refers to... See more

    Economic Profit

    Economic profit is a form of profit that is derived from producing goods and services while factoring in the alternative uses of a company's resources. It deducts explicit costs from r… See more

    Investopedia
    Accounting Profit

    Accounting profit is also known as a company's earned profit, net income, or bottom line. Unlike economic profit, accounting profit is reported on a company's … See more

    Investopedia
    Key Differences

    Economic profit is more of a theoretical calculation based on alternative actions that could have been taken. Accounting profit, on the other hand, calculates what actually occurred a… See more

    Investopedia
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  2. Accounting loss is calculated by subtracting expenses from revenue, while economic loss considers both explicit costs and opportunity costs123. Specifically:
    • Accounting loss: Based on actual cash outlays and inflows.
    • Economic loss: Incorporates a "what if" analysis and considers opportunity costs.
    Learn more:
    Accounting costs represent anything your business has paid for. You can calculate accounting cost by subtracting your expenses from your revenue. Economic costs represent any “what-if” scenarios for your business. You can calculate economic cost by subtracting implicit costs from your accounting cost.
    www.fool.com/the-ascent/small-business/accountin…
    Accounting profit measures the actual cash outlays and inflows, while economic profits incorporate a “what if” analysis. For this reason, an entity may report an accounting profit but realize an economic loss because resources could have been utilized better.
    www.investopedia.com.cach3.com/terms/e/econo…
    Economic profit equals total revenue minus total cost, where cost is measured in the economic sense as opportunity cost. An economic loss (negative economic profit) is incurred if total cost exceeds total revenue. Accountants include only explicit costs in their computation of total cost.
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  4. Economic Profit (or Loss): Definition, Formula, and …

    WEBApr 11, 2024 · Economic profit (or loss) is the difference between the revenue received from the sale of an output and the costs of all inputs, including opportunity costs.

     
  5. Economic profit vs accounting profit (video) | Khan Academy

  6. Should You Rely on Accounting Profit or Economic …

    WEBMay 10, 2024 · Accounting profit subtracts only explicit costs from revenue. These are actual costs of the business, such as wages or cost of goods sold. Economic profit subtracts both explicit and implicit...

  7. Economic Profit (or Loss): Definition, Formula, and …

    WEBKey Takeaways. Economic profit considers both explicit costs and opportunity costs. Formula: Economic Profit = Total Revenue – Explicit Costs – Opportunity Costs. Example: Revenue of $10,000, explicit costs …

  8. Accounting Profit vs Economic Profit - Corporate …

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     · Accounting Profit vs. Economic Profit. Accounting profit is a company’s net earnings on its income statement, whereas economic profit is the value of cash flow that’s generated above all other opportunity costs.

  9. Accounting Profit vs. Economic Profit: What's the …

    WEBSep 23, 2021 · Economic profit is a little trickier than accounting profit. With economic profit, you look at revenue, explicit costs, and implicit costs. Unlike accounting profit, economic profit includes the opportunity costs …

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