Accounting profit is a more comprehensive measure of profitability than economic profit, as it includes both explicit and implicit costs.

Accounting profit measures a company's profitability by looking at its total revenue minus explicit costs, which are direct expenses like wages, rent, and materials. In contrast, economic profit goes further by also considering implicit costs, which include the opportunity costs of using resources in one way instead of another. For example, if a business owner could earn a salary working for someone else but chooses to run their own business, that lost salary is an implicit cost. This means that while accounting profit might show a healthy profit, economic profit gives a clearer picture of how well the business is doing by factoring in all costs. Therefore, understanding both types of profit helps in making better financial decisions and assessing true profitability.