Bottom Line

Bottom Line Meaning

Bottom line refers to the net income that a company generates after considering the profit earned and losses incurred. The word bottom in the term depicts the location of the net earnings or the net income in the income statements, i.e., the last line of the bottom of the page. It is an important part of the document as it signifies the total profit reaped or total loss incurred by a firm.

A bottom line appears to be a ready reference for the management and directors to go through to make major business decisions. As a result, companies try to improve it by adopting measures to increase revenue and enhance productivity.

• The bottom line, also called net income, is the total profit or loss of the business for a particular reporting period.
• It can be improved by increasing revenue, decreasing costs and expenses, and improving efficiency in operations.
• The name indicates the location of the net income figure in the income statement, i.e., at the bottom of the last line of it.
• Considering triple bottom line makes companies consider their social and environmental factors besides their financial performance.

Bottom Line Explained

Bottom line usually refers to the most important conclusion or outcome derived from an explanation, elaboration, or discussion. In business, the term signifies the last thing that ultimately matters to the companies – the profits/earnings/income. 

Firms frame strategies, adopt measures, carry out functions, and do whatever is necessary to be productive and profitable. The income statement's bottom line indicates how effective all means have been in increasing the efficiency and profitability of companies. 

At the bottom of the document, these figures ensure that all expenses are already deducted from the revenue generated for that period to obtain the net income that companies are left with. These expenses or liabilities include everything from loans and taxes payable, interest expenses,"answer":,"jsonQuestion":"What is the bottom line?","jsonAnswer":"Bottom line is the total profit or loss of the business for a particular reporting period. It is one of the critical factors that reflect the true business progress and position. It can be improved by increasing revenue, decreasing costs and expenses via various strategies, and improving efficiency in operations."},{"id":"faq-question-1653896959003","question":,"answer":,"jsonQuestion":"What is the triple bottom line?","jsonAnswer":"The concept makes companies consider their social and environmental factors besides their financial performance. The idea works on 3Ps – Profit, People, and Planet."},{"id":"faq-question-1653896974306","question":,"answer":,"jsonQuestion":"How to calculate the bottom line?","jsonAnswer":"It is calculated as the difference between the total revenue generated by a company for a period and the total expenses incurred, including the taxes, interest rates on loans, and other obligations."}]} -->

Recommended Articles

This article is a guide to what is Bottom Line and its meaning. Here we explain its improvement methods along with examples and its differences with top line. You can learn more about financing from the following articles –

• Above the Line Deductions
• Bottom Fishing
• Business Loan Calculator
• EBIT vs Net Income