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Residual Income Calculator

Finance

Calculate residual income (economic profit), a company's net income after subtracting a charge for the cost of its equity capital.

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USD
$0.00$1,000,000,000,000.00
USD
$0.00$1,000,000,000,000.00
%
0%100%

Residual Income

-$17,880,000.00

Net income remaining after charging for the cost of equity capital used to generate it. Negative means the company earned less than its equity investors required.

USD

Equity Charge

$98,400,000.00

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Odeh Ahwal

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Odeh Ahwal
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Frequently Asked Questions

How is residual income calculated?

Residual Income = Net Income - (Equity Capital x Cost of Equity). The second term, the equity charge, represents the minimum return equity investors require.

Is this the same as disposable or discretionary income?

No. This is the corporate-finance concept of economic profit. Disposable and discretionary income are separate personal-finance concepts with their own dedicated calculators.

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