The top line and bottom line are two of the most important lines on the income statement for a company. More specifically, the bottom line is a company's income after all expenses have been deducted from revenues. These expenses include interest charges paid on loans, general and administrative costs, and income taxes. A company's bottom line can also be referred to as net earnings or net profits. Knowing the factors that impact both the top and bottom lines can help investors determine whether a company's management is growing its sales and revenue and managing expenses efficiently.
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The purpose of the income statement is to show managers and investors whether the company made money profit or lost money loss during the period being reported. An income statement represents a period of time as does the cash flow statement. This contrasts with the balance sheet , which represents a single moment in time. Charitable organizations that are required to publish financial statements do not produce an income statement. Instead, they produce a similar statement that reflects funding sources compared against program expenses, administrative costs, and other operating commitments. This statement is commonly referred to as the statement of activities.
Total revenue earnings for the period appear at the top of the Income statement. Net income, or net profit, appears as the bottom line. Net income shows what remains after subtracting all the period's expenses from revenues.
The bottom line refers to a company's earnings , profit , net income , or earnings per share EPS. The reference to bottom line describes the relative location of the net income figure on a company's income statement. Bottom line is commonly used in reference to any actions that may increase or decrease net earnings or a company's overall profit. A company that is growing its earnings or reducing its costs is said to be improving its bottom line. Most companies aim to improve their bottom lines through two simultaneous methods: increasing revenues i.