Accounting Profit Calculator
Accounting profit is what is left after subtracting all explicit costs from revenue — the profit figure that appears on an income statement. Enter your total revenue and total expenses and the calculator returns your accounting profit and profit margin. Unlike economic profit, it ignores implicit costs such as the opportunity cost of your own time or capital.
Formula
Accounting Profit = Revenue − Total Expenses
- Accounting profit = total revenue − total explicit expenses.
- Explicit expenses include cost of goods sold, wages, rent, utilities, interest and depreciation.
- Profit margin = (accounting profit ÷ revenue) × 100, the share of each sales dollar kept as profit.
- It excludes implicit costs, so it is higher than economic profit, which also charges for owner time and capital.
- This is a pre-tax figure unless tax is already included in your expenses.
Example Calculation
Inputs
- Total Revenue: 100000
- Total Expenses: 60000
With 100,000 in revenue and 60,000 in total expenses, accounting profit is 100,000 − 60,000 = 40,000, giving a profit margin of (40,000 ÷ 100,000) × 100 = 40%.
Frequently asked questions
What is accounting profit?
It is revenue minus all explicit (out-of-pocket) costs — the profit figure reported on a company's income statement.
How does it differ from economic profit?
Economic profit also subtracts implicit costs, such as the income you gave up to run the business. Accounting profit ignores these, so it is usually higher.
What counts as an expense?
All explicit costs of doing business: materials, wages, rent, utilities, marketing, interest and depreciation.
What is profit margin?
It is accounting profit as a percentage of revenue, showing how much of each unit of sales is kept as profit.
Is this before or after tax?
It is before tax unless you have already included tax within total expenses. Subtract tax separately for net profit.