What is the difference between accounting profit and economic profit?

What is the difference between accounting profit and economic profit Introduction: The Dual Perspectives on Profit Hello, everyone! Welcome to our video on accounting profit and economic profit. When we think of profit, we often envision the financial gain a business makes. However, there are multiple ways to assess and evaluate this gain. Accounting profit and economic profit provide distinct viewpoints, each with its own merits. Let's start by understanding the basics. Accounting Profit: The Traditional Measure Accounting profit is the more familiar concept, often used in financial statements and tax calculations. It's a straightforward calculation: total revenue minus explicit costs. Explicit costs include expenses like wages, rent, and raw materials. In essence, accounting profit reflects the monetary gain a business has after accounting for its explicit expenses. While it's a valuable metric, it has its limitations. Limitations of Accounting Profit