What Is a Bottom Line in Accounting, and Why Does It Matter?

For topics on particular articles, maintain the dialogue through the usual channels with your editor. It is calculated as the difference between the total revenue generated by a company for a period and the total expenses incurred, including the taxes, interest rates on loans, and other obligations.

• Net IncomeNet income for individuals and businesses refers to the amount of money left after subtracting direct and indirect expenses, taxes, and other deductions from their gross income.
• General review.Provides an overview or historical examination of some concept, technique or phenomenon.
• The chart shows the evolution of the average number of times documents published in a journal in the past two, three and four years have been cited in the current year.
• An income statement is one of the three major financial statements that report a company’s financial performance over a specific accounting period.
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At the end of your paper, please supply a reference list in alphabetical order using the style guidelines below. Where a DOI is available, this should be included at the end of the reference. Conceptual paper.Focuses on developing hypotheses and is usually discursive. Covers philosophical discussions and comparative studies of other authors’ work and thinking.

EXPENSE REDUCTIONINCREASE IN PROFITABILITYENHANCE EVALUATION

The reference to the bottom line describes the relative location of the net income figure on a company’s income statement. Organizations mostly depend on financial performance to gauge performance. Profits tend to focus on aspects of a business that generate revenue, such as business decisions made, strategic planning, or performance and cost reduction methods. This indicator counts the number of citations received by documents from a journal and divides them by the total number of documents published in that journal. The chart shows the evolution of the average number of times documents published in a journal in the past two, three and four years have been cited in the current year.

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To help us achieve that goal, we closely follow the advice laid out in the guidelines and flowcharts on the COPE website. We aim to provide a mix of readable practitioner-focused articles and “classic” academic articles, so that readers can in one journal see how academic and practitioner thinking is evolving. Fifth, we inputed the data and assumptions, assigned a final monetary value to the benefits, and compiled the results for the case study. Public/commerce statistics, for example) where data was not previously available or where estimates were needed to build assumptions. Benefits that proved to be unquantifiable or irrelevant were discarded.

The bottom line tells a company how profitable it was during a period and how much it has available for dividends and retained earnings. What’s retained can be used to pay off debts, fund projects, or reinvest in the company. From here, a company may elect to use net income in several different ways. The bottom line can be used to issue payments to stockholders as an incentive to maintain ownership; this payment is called a dividend.

Words related to bottom line

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Gross sales or revenues generally include the total sales and other income for a certain period. Examples of commonly used expenses include depreciation expenses, operating expenses, and interest expenses from the same accounting period. Increases in the top line indicate an increase in sales or revenues, whereas increases in the bottom line could indicate an increase in sales, a decrease in expenses, or both. An increased top line indicates that more products and services were sold in the reported period. However, it does not necessarily correspond to a higher net profit or income.

Global Knowledge, Memory and Communication

In accordance with this theory, a company’s commitment to being socially and environmentally responsible is used along with profitability to evaluate performance. Bottom line This may be done by increasing production, lowering sales returns through product improvement, expanding product lines, or increasing product prices.