Bottom line definition

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A company’s bottom line is an important factor in share trading. Variously, it can be used to refer to the net earnings or earnings per share (EPS) of a business.

A company’s bottom line is the total profit made on an income statement, minus all of the losses incurred including the cost of goods, tax and interest payments on debts. If referring to EPS, the figure is divided by the number of outstanding shares in the company.

Bottom line comes from the position of net income in a company’s earnings report: at the bottom. In this regard it stands in contrast to top line, or the revenue figures for a business.

There are two main ways in which a business will attempt to improve its bottom line. Firstly it will increase profits, and secondly it will decrease costs.

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