Accounting profit charges for debt through interest-expense but never charges for equity. Economic profit fixes that by subtracting invested capital times wacc. A positive result means the business earns more than its funders require.
It reframes growth: expanding a business whose return-on-invested-capital is below its cost of capital reduces economic profit even while eps rises. That gap explains many acquisitions that look accretive and destroy value.
Example: Northwind Tools earns $91M after tax on $1,081M of invested capital with an 8.1% WACC. The capital charge is $88M, so economic profit is $3M: the business is barely clearing its hurdle.
Related: return-on-invested-capital, wacc, invested-capital, capital-allocation, discounted-cash-flow