The Difference between Bottom-line Growth and Top-line Growth

Two of the most critical lines on the income statement for a company are the top line and bottom line. Signs of any changes from year to year are being paid attention from investors and analysts.

A company’s revenues or gross sales are called the top line. The company is experiencing an increase in total sales or taxes when it has top-line growth.

The bottom figure, or the company’s net income, on a company’s income statement, is called the bottom line.

Expenses have been deducted from revenues, after all. The bottom line is a company’s income. General and administrative costs, interest charges paid on loans, and income taxes are included in the expenses. Net earnings or net profits are also a company’s bottom line.

Bottom-line vs. Top-line Key Differences

When both top and bottom lines grow, the company is said to be profitable. However, more established companies might have lower sales or revenue for a reporting period but are still able to improve their bottom line through expenses reduction. During periods of sluggish economic activity or recession, cost-cutting measures are standard.

Investors can determine whether a company’s management is growing their sales and revenue and managing expenses efficiently when they know the factors that impact both the top and bottom lines.

Special Considerations

To increase the bottom line, management can enact strategies. The topliners should filter down and boost the bottom line, for the starters to increase in revenue. By lowering sales returns through product improvement, increasing production, expanding product lines, or increasing prices, this can be done. Other income, such as interest income, investment income, co-location fees, or rental, and the sale of property, also increase the bottom line.

Through the reduction of expenses, a company can increase its bottom line. Using different input goods or with a more efficient method, a company’s products could be produced. There are ways to improve the bottom line, such as operating out of less expensive facilities, decreasing wages and benefits, utilizing tax benefits, and limiting the cost of capital. A boost to the company’s bottom line finding a new supplier for basic materials that appeared in a cost savings of million dollars, is an example. Conversely, an indication the company has suffered a dip in income or a surge in expenses if a company’s bottom line shows a curb from one period to the next.

On the income statement, the bottom line of a company does not carry over from one period to the next from an accounting standpoint. All revenue and expense accounts are included in closing all temporary accounts, accounting entries are performed. The bottom line is transferred to maintained earnings upon the closing of these accounts.

Net income or the bottom-line figure can be sent in several different ways by a company’s executives. To issue payments to shareholders in the form of dividends as an incentive to maintain ownership, the bottom-line can be used.

Alternatively, to repurchase stock and retire equity, the bottom line can be used. Or a company may keep all earnings reported on the bottom-line to utilize in product development, or other means of improving the company.

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I     Advantages of the Forex Market            3
II    Basic Forex Concepts                              8
III   Orders in the Forex Market                     13
IV   Game Plan for Successful Trading       18
V    Beginner Trading Strategies                   25

Chapter 1:


1.1. What Is The Forex Market?

The Forex market is a place in which investors are allowed to trade foreign currencies in a given trading period. It is considered to be the world’s largest market with a daily output of 3 trillion US dollars.

The value of currencies is constantly changing every minute throughout the day, depending on the supply and demand levels. Therefore, the market is open twenty-four hours a day five days a week.

Compared to other financial mediums, the Forex market provides better security in the world of investment.

The concept of Forex trading is similar to the regular market, where participants buy and sell goods. In the Forex market, traders are buying and selling foreign currencies. There are over 100 currency pairs available in the financial markets.

There is a uniform currency exchange rate used in the global financial markets. Whatever exchange rate is used in New York, it will be the same exchange rate used in other countries.

The Forex market involves an international network of computers and brokers from all over the world.

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