Bottom line

For many companies, the bottom line is the most important factor which you have to consider in any decision-making process, situation or strategy. One can argue that the bottom line numbers are a very important component of the scorecard for management. Think about the bottom line in business like the bottom line of a conversation; the bottom line is like a conclusion. It helps you determine what to do next.

What is Bottom line?

The bottom line refers to a company’s net profit, net earnings, net income or earnings per share (EPS). The reason behind the name comes from the fact that the bottom line in fact is the “bottom” figure on a company’s income statement. Described more specifically, the bottom line is a company’s income after all expenses, such as loans and administrative costs have been deducted from revenues.

How can management positively impact the bottom line?

Management can enact different strategies to increase the bottom line. For instance, if they are able to increase the revenue it will have a positive effect on the bottom line as well as though the reduction of expenses. Both can be achieved by e.g. implementing a Pre & Onboarding process in the company.

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