📊 Accounting Profit Calculator
Calculate accounting profit
All explicit costs (wages, rent, materials, etc.)
How to Use This Calculator
Enter Total Revenue
Input the total revenue - all income from sales, services, or other business activities.
Enter Explicit Costs
Enter all explicit costs - actual monetary expenses like wages, rent, materials, utilities, taxes, etc. This does not include implicit costs (opportunity costs).
Review Accounting Profit
See the accounting profit (revenue minus explicit costs) and profit margin. Accounting profit is used for financial reporting and tax purposes.
Formula
Accounting Profit = Total Revenue - Explicit Costs
Profit Margin = (Accounting Profit / Total Revenue) × 100
Example Calculation:
If revenue $100,000, explicit costs $60,000:
• Accounting profit = $100,000 - $60,000 = $40,000
• Profit margin = ($40,000 / $100,000) × 100 = 40%
About Accounting Profit Calculator
An accounting profit calculator helps you calculate accounting profit from total revenue and explicit costs. Accounting profit is the profit calculated using explicit costs (actual monetary expenses) only, not including implicit costs (opportunity costs). Accounting profit is used for financial reporting, tax purposes, and business performance measurement. It's different from economic profit, which includes both explicit and implicit costs.
When to Use This Calculator
- Financial Reporting: Calculate accounting profit for financial statements
- Tax Purposes: Calculate profit for tax reporting
- Business Performance: Measure business profitability
- Profit Analysis: Analyze profit from revenue and costs
Understanding Accounting Profit
- Explicit Costs: Actual monetary expenses (wages, rent, materials, etc.)
- Implicit Costs: Opportunity costs (not included in accounting profit)
- Accounting Profit: Revenue minus explicit costs only
- Economic Profit: Revenue minus explicit and implicit costs
Why Use Our Calculator?
- ✅ Profit Calculation: Calculate accounting profit accurately
- ✅ Financial Reporting: Prepare financial statements
- ✅ Tax Planning: Calculate profit for tax purposes
- ✅ Business Analysis: Analyze business profitability
- ✅ 100% Free: No registration or payment required
Frequently Asked Questions
What is accounting profit?
Accounting profit is the profit calculated using explicit costs only (actual monetary expenses), not including implicit costs (opportunity costs). Accounting profit = Total Revenue - Explicit Costs. Accounting profit is used for financial reporting, tax purposes, and business performance measurement. It's the profit shown on financial statements and tax returns.
What's the difference between accounting profit and economic profit?
Accounting profit only subtracts explicit costs (actual monetary expenses) from revenue, while economic profit subtracts both explicit and implicit costs (opportunity costs). For example, if revenue is $100,000, explicit costs are $60,000, and implicit costs (like owner's salary opportunity) are $20,000: Accounting Profit = $40,000, Economic Profit = $20,000. Accounting profit is used for financial reporting, while economic profit is used for economic analysis.
What are explicit costs?
Explicit costs are actual monetary expenses that a business pays, such as wages, rent, materials, utilities, taxes, insurance, and other out-of-pocket expenses. These are costs that require actual cash payments and are recorded in accounting records. Explicit costs are included in accounting profit calculations but not implicit costs (opportunity costs).
Why is accounting profit important?
Accounting profit is important for: (1) Financial reporting - shows profit on financial statements, (2) Tax purposes - used to calculate taxable income, (3) Business performance - measures profitability, (4) Investor analysis - helps investors assess business performance, (5) Regulatory compliance - required for financial reporting. Accounting profit provides a standardized measure of profitability for financial and tax purposes.