We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

In Business, what is the Bottom Line?

Malcolm Tatum
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

For many investors, the bottom line is one of the single most important pieces of data on the company balance sheet. Essentially, this is the amount of profit that is realized after all expenses and taxes have been satisfied. Because bottom lines begin with the gross sales and then deduct taxes and expenses to affirm the net earnings for a given financial period, investors are able to quickly determine the current status of the company. The bottom line sums up all the data, so it is possible to know if the company is realizing some net income from the business venture, or if the operation is currently operating in the red.

The bottom line can be a cause for rejoicing, or it can provide the motivation to make some changes in the way the company operates. In situations where there is little or no net profit realized, steps are usually taken to increase the profitability of the corporation. Depending on the circumstances, the strategy to increase profits may originate with investors, or with the management of the company.

Making improvements to the bottom line can be accomplished in several different ways. Since it is the amount of revenue left after all expenses are met, a logical approach to improving the bottom line is to decrease the amount of resources that go to covering expenses. This will often involve some cuts in departmental budgets, or at the very least eliminating discretionary funds that are called upon to handle expenses not covered in existing budgets. The cuts may be realized by eliminating positions and combining responsibilities, cutting back on the availability of overtime, and reducing some full time positions to part time.

Along with trimming expenses, profit is often increased by developing new revenue streams for the company. This may include launching a new good or service, or finding a new market for an existing product. If at all possible, the new source of revenue is cultivated with little or no extra expense, which helps to maximize the impact of the new revenue stream on the bottom line.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By comfyshoes — On Oct 27, 2010

Icecream17-I agree as I also invest in dividend funds. I just wanted to say that the other day I heard someone talking about a triple bottom line and I did not know what it was.

I was told that it was a reference often made by environmentally conscious businesses that refers to its people, planet, and profit.

It takes into account all business practices that have changed to be more environmentally friendly. For example, my children’s school in an effort to reduce expenses, be more environmentally focused and profitable they have stopped mailing invoices and have instead sent 100% of the school correspondence by email.

This allows the school to save the money on postage, thus increasing the profit, reduce the amount of paper actually used, which helps the planet, and allows its people more time to devote to other tasks which will make them more productive.

By icecream17 — On Oct 27, 2010

GreenWeaver-I know that companies with a great bottom line also share some of these profits with investors when they declare dividends.

Dividends are an additional yield earned on a stock that is normally paid quarterly or annually. Many people rely on dividends as passive income that often allows investors to live more comfortable lifestyles.

My husband’s grandparents relied on the income from dividends of various stocks and holdings in order to live comfortably in retirement. These income producing assets make a difference over time.

By GreenWeaver — On Oct 27, 2010

In business the bottom line actually is what keeps the businesses afloat. The bottom line or profit allows companies to expand their product assortments and hire new employees.

Profitable businesses that have a healthy bottom line might also invest in new technologies that will ultimate enhance the customer experience.

For example, in my children’s school they now use touch screens and white boards in order to make the learning process multisensory and interactive.

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.