I’ve received a few e-mails from readers asking the difference between top line and bottom line growth. I thought it would be appropriate to post my answer here as these are very common terms that most companies use in both their reports and in conference calls and interviews. For example, you’ll often hear statements such as “although bottom line growth slowed a little more than expected this quarter we were very pleased with the top line growth and are on target to blah blah blah...”
Simply put, the bottom line is a company’s income after all expenses have been deducted. If you take a look at an income statement the reasoning behind the term “bottom line” will become obvious as net income is literally the bottom number on the statement. Other terms for the bottom line are “net income” or “net profit”.
Top line growth refers to the “gross sales” or “gross revenue” of a company. For example, if a company increased their sales or revenue by 20% then they are said to have experienced top line growth. You probably would have guessed this by now but, the revenue section of an income state is at the top of the document and thus the term “top line growth”.
Hope this helps.