What Is a Company's Bottom Line?

A company's bottom line is the amount of money a company has after all expenses have been taken out. It is the last line of the company's income sheet, so it is called the bottom line.

Top Line

In determining the bottom line, you first start out with a top line. This is the first line of the statement and includes all revenues and sales.

Types of Costs Taken from the Top Line

Interest charges on loans, general administrative costs and advertising are all types of costs that come off the top line.

Arriving at the Bottom Line

After all of the costs have figured and taken away on the balance sheet, you are left with a net earning or net profit figure. This is your bottom line and the profitability of the company.

Significance of the Bottom Line

The percentage of the top line that reaches the bottom line shows the efficiency of the company's operation.

Considerations

A bigger top line does not always mean a bigger bottom line. For the bottom line to grow, expenses must be controlled. Sometimes this is done with a smaller top line and an outstanding job of expense control.