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  • Acumen Learning

The Bottom Line: It's Important

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Consider This​

When you hear leaders say that a new strategy is going to improve the bottom line, they are talking about net profit (sometimes called net income or net earnings) - because net profit is generally the last line, or the bottom line, on the income statement. Net profit is simply all revenues/sales minus all expenses.

So there are two fundamental ways to improve the bottom line: increase revenues (sell more) and/or reduce expenses (spend less). That sounds pretty easy - and sometimes it is - but more often than not strategies based on either of these goals can be difficult to execute and can have unexpected results. For example, sometimes increasing revenues requires making investments that might not earn a return in the near future - or at all. Likewise, growing revenues by raising prices could have the effect of lowering sales. Improving the bottom line is almost always the main strategy of a company.

Share this AirTran commercial in your next team meeting… towards improving that process.