Economic Profit

This measure is underpinned by the concept that a business only adds value for its shareholders if it makes a profit in excess of its cost of capital. Economic profit is calculated as the amount by which profits exceed or fall short of the required return for shareholders. A positive economic profit represents that the business is creating shareholder value. A negative economic profit means that the business is destroying shareholder value. For this period, the economic profit of ($268,855) generated by the business was less than the target of $0.