Firm Financial Data
💡 Key Concept
Accounting profit = Revenue − Explicit costs (what the accountant sees).
Economic profit = Accounting profit − Opportunity cost of capital.
A firm with positive accounting profit but negative economic profit is covering its bills
but failing to reward investors for the risk they bear.
📊 Accounting Profit (NOPAT)
—
NOPAT = Revenue − Operating Expenses − Taxes
💰 Economic Profit (EVA)
—
EVA = NOPAT − (Invested Capital × Required Return)
Opportunity Cost of Capital
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EBIT (Operating Income)
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Adjust the sliders to explore how costs affect firm performance.
| Line Item | Amount | Notes |
|---|---|---|
| Revenue | — | Total sales |
| Operating Expenses | — | Explicit costs of production |
| EBIT | — | Revenue − Operating Expenses |
| Taxes | — | Income taxes paid |
| NOPAT (Accounting Profit) | — | EBIT − Taxes |
| Invested Capital | — | Shareholders' equity + debt |
| Required Return Rate | — | Investors' opportunity cost |
| Opportunity Cost of Capital | — | Capital × Required Return |
| Economic Profit (EVA) | — | NOPAT − Opportunity Cost |