If the long-term trend in the change is positive, you are getting ahead. If it is negative, you are falling behind and changes must be made in your personal finances to avoid bankruptcy. The capital charge is capital times the cost of capital. Capital is the net book value of how much is invested in assets such as accounts receivable, inventory, machinery, plants, and buildings. The cost of capital is a blend of borrowing costs and shareholders' expectations for dividends and stock appreciation.
Economic profit measures the change in shareholder value for a given level of revenues.
This is similar to the calculation of the change in your net worth. If the long-term trend in economic profit is positive, shareholder value is being created. This means that a company is earning a return in excess of its cost of capital. If it is negative, shareholder value is being destroyed because the company is earning less than its cost of capital. Shareholders would be better off placing their money elsewhere.