Bottom line definition

What is the Bottom Line in Accounting?

The bottom line is the profit or loss reported by a business. This information is located on the lowest line of the income statement, which is the "bottom line" on the report. Someone reading a company's income statement may skip straight to the bottom line to discern the results of the organization, before going back through the details of the income statement to see what caused the profit or loss.

How to Improve the Bottom Line

The bottom line is improved either by growing revenues or decreasing expenses. Revenue growth is more difficult, since it is, to some extent, outside of the control of the business - customers must decide whether they want to purchase from the firm. It is easier to reduce expenses, since they are under the control of the organization.

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