Residual Income Calculator
FinanceCalculate residual income (economic profit), a company's net income after subtracting a charge for the cost of its equity capital.
Residual Income
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.
Equity Charge
$98,400,000.00
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Odeh Ahwal0people find this calculator helpful
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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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