Browse Definitions :
Definition

top line

Top line is a number that represents a company’s gross revenue or sales from products or services; this figure is so-named because it appears at the top of an income statement. The United States Securities and Exchange Commission (SEC) compares an income statement to a staircase with total revenue during a specific accounting period at the top, the steps below that show deductions for various costs or other operating expenses associated with earning the revenue, and the final step as the bottom line, or net income, after all the deductions are made.

Top-line growth, which refers to an increase in gross revenue or sales, shows how effective a company is at generating sales. However, the top line does not take into account operating efficiencies and costs that affect a company’s bottom line, or net profits, which appears on the bottom line of an income statement. Yet, it is possible for a company to experience top-line and bottom-line growth simultaneously if it keeps its operating costs in check. A company may report top-line growth but not bottom-line increases, or vice versa, in a given period, however the top and bottom lines -- as well as the numbers in between -- are crucial in determining a company’s financial health.

According to the American Management Association (AMA), revenue growth that is based on "customer benefit" is more likely to improve top line growth. The association defines customer benefit as the advantage customers gain from their experience of selecting and using a particular product or service. This is because when a product offers customers value, they are willing to pay more and play a bigger role in making the product profitable. They are also more willing to promote the product through word of mouth and social media marketing channels, which can help lower advertising costs. 

This was last updated in November 2017

Continue Reading About top line

SearchCompliance
  • pure risk

    Pure risk refers to risks that are beyond human control and result in a loss or no loss with no possibility of financial gain.

  • risk reporting

    Risk reporting is a method of identifying risks tied to or potentially impacting an organization's business processes.

  • risk avoidance

    Risk avoidance is the elimination of hazards, activities and exposures that can negatively affect an organization and its assets.

SearchSecurity
  • script kiddie

    Script kiddie is a derogative term that computer hackers coined to refer to immature, but often just as dangerous, exploiters of ...

  • cipher

    In cryptography, a cipher is an algorithm for encrypting and decrypting data.

  • What is risk analysis?

    Risk analysis is the process of identifying and analyzing potential issues that could negatively impact key business initiatives ...

SearchHealthIT
SearchDisasterRecovery
  • What is risk mitigation?

    Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a business.

  • fault-tolerant

    Fault-tolerant technology is a capability of a computer system, electronic system or network to deliver uninterrupted service, ...

  • synchronous replication

    Synchronous replication is the process of copying data over a storage area network, local area network or wide area network so ...

SearchStorage
  • gigabyte (GB)

    A gigabyte (GB) -- pronounced with two hard Gs -- is a unit of data storage capacity that is roughly equivalent to 1 billion ...

  • MRAM (magnetoresistive random access memory)

    MRAM (magnetoresistive random access memory) is a method of storing data bits using magnetic states instead of the electrical ...

  • storage volume

    A storage volume is an identifiable unit of data storage. It can be a removable hard disk, but it does not have to be a unit that...

Close