The bottom line refers to the last line on a company’s income statement. This line shows net profit after all expenses, depreciation and taxes have been deducted from revenue. This is in contrast to gross revenue, which is sometimes referred to as “top line”.For instance, look at a simple income statement for BL, Inc. BL, Inc. Income Statement Year Gross Sales 5,000,000 Cost of Goods Sold -2,500,000 Gross Margin 3,000,000 Operating Expenses -2,000,000 Net Income Before Taxes & Depreciation 1,000,000 Taxes -250,000 Depreciation -100,000 Net Profit 650,000 The top line number is the $5 million in sales. After deductions are made for cost of goods sold, operating expenses, taxes and depreciation, what is left over on the bottom line of the income statement is $650,000 in net profit. Often, the bottom line becomes an important metric for evaluating a corporate decision. A manager will ask, “How will this affect the bottom line?” Obviously, if the action decreases the bottom line, it’s likely bad. If it increases the bottom line, it’s good. There are generally two ways to increase the bottom line. Cutting expenses to increase company efficiency is the easiest way, although excessive cuts can eventually reduce productivity, and lead to a decrease of the bottom line. The other way to improve the bottom line is to increase the top line revenue numbers by selling more goods or services, but this can raise operating expenses. Thus, maintaining a healthy bottom line is considered a balancing act.