Has the same meaning as economic value added (EVA). The economic profit of any project or activity is the market value of the output of that project less the cost of all inputs to production of that output. Where cost, as always, is defined as the value of each input in its most valuable alternative use. The principle way in which economic profit differs from accounting profit is that the later does not take account of the cost of the financial capital employed in the project. For small businesses accounting profit does not take account of income that the owner could generate doing something else.

In most mature markets firms on average make zero economic profits. Meaning that the accounting profits are simply commensurate with the amount of financial capital employed and the riskiness of the firm's cashflows. Firms can only make positive economic profits in the long run if there are barriers to new firms entering the industry or if they can maintain a lower cost structure in the long run (which is rare).