An induced subgraph S of a graph G is called a derived subgraph of G if S contains no isolated vertices. An edge e of G is said to be residual if e occurs in more than half of the derived subgraphs of G. We prove some theorems which calculate the number of derived subgraphs for some special graphs. We also present a new algorithm SDSA that calculates the number of derived subgraphs for a given graph G and determines the residual and non-residual edges. Finally, we introduce a computational study which supports our results.