Top Line

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Income Statement

    A financial statement that measures a company's financial performance ...
  2. Operating Income

    The amount of profit realized from a business's operations after ...
  3. Revenue

    The amount of money that a company actually receives during a ...
  4. Bottom Line

    Refers to a company's net earnings, net income or earnings per ...
  5. Unit Sales

    A measure of the total sales that a firm earns in a given reporting ...
  6. Insurance Regulatory Information ...

    A collection of databases and tools used to analyze the financial ...
Related Articles
  1. Great Expectations: Forecasting Sales ...
    Fundamental Analysis

    Great Expectations: Forecasting Sales ...

  2. Revenue Projections Show Profit Potential
    Investing Basics

    Revenue Projections Show Profit Potential

  3. Find Investment Quality In The Income ...
    Options & Futures

    Find Investment Quality In The Income ...

  4. Understanding The Income Statement
    Forex Education

    Understanding The Income Statement

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center