lost profit analysis

Lost profit analysis is a method used to estimate how much money a business could have earned if a disruptive event, like a lawsuit or accident, had not occurred. It involves reviewing past financial data, market conditions, and business operations to determine expected revenue and profit during the affected period. This analysis helps quantify the financial impact of the loss, providing a basis for claims or decision-making. Essentially, it measures the opportunity cost or profit the business missed out on because of the adverse event.