2017-03-29 00:00:00 Cash Flow English Find out what the bottom line of a company is and what small business owners can do to increase the bottom line of their businesses. https://d1bkf7psx818ah.cloudfront.net/wp-content/uploads/2017/06/08213915/Restaurant-manager-reviews-financials-and-bottom-line-on-computer-with-plants-and-table-numbers-in-view.jpg What is the Bottom Line of a Company

What is the Bottom Line of a Company

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The bottom line of a company is its net earnings or net income, which is located at the bottom of an income statement. This figure is calculated by subtracting the expenses of operating the business from its total revenue. For example, suppose a company has a total revenue of $500,000, an interest expense of $50,000, tax expense of $60,000, and other expenses that add up to $70,000. Its bottom line is $500,000 – $50,000 – $60,000 – $70,000 = $320,000. To increase the bottom line, small business owners can increase their revenue. For example, they can raise product prices or improve their products to reduce returns. Alternatively, they can increase the bottom line of their business by decreasing their expenses, such as lowering the cost of producing their products. By increasing the bottom line, their businesses become more profitable.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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