Top Line

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DEFINITION of 'Top Line'

A reference to the gross sales or revenues of a company, or an allusion to a course of action that increases or reduces revenues. The "top" reference relates to the fact that on a company's income statement, the first line at the top of the page is generally reserved for gross sales or revenue. A company that increases its revenues is said to be "growing its top line", or "generating top-line growth".

This contrasts with net income (or net earnings per share), which is usually the bottom line of the company's income statement.

BREAKING DOWN 'Top Line'

While there are number of different business models that have proved to be successful, every company is faced with the two simple goals of:

1. Growing revenues, or generating top-line growth
2. Growing net income, or generating bottom-line growth.

Part of the reason why the term is used so often is that it clarifies minor nuances between the sources of revenue, whether it's from selling a product, collecting interest or servicing an account. "Top-line" is broad enough to include all of the company revenues into one category prior to calculating other income statement metrics such as operating profit and net income.

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