Bottom line definition

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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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Bottom line definition

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