If you’re the type that likes to tell long-winded stories, your friends might frequently ask, “Will you get to the bottom line?” Although, uh...there might be a few four-letter words thrown in there for effect.
In the finance world, the bottom line refers to the profit shown at the end of a company’s income statement that subtracts total costs from total revenue. It could be labeled as "net income" or "earnings per share."
If a company is not happy with its bottom line at the end of a month, quarter, or year, it has two choices: reduce costs or increase revenue (or both). Reducing costs could mean the painful experience of having to lay off employees, or trying to lower the cost of raw materials or administrative expenses. (Say good-bye to free coffee.)
As this tactic alone often results in a downward spiral, many decide it’s time to find new markets, introduce new products, sell properties, increase prices, or expand overseas in order to increase revenue. And if a bottom line is positive, the company could use the profit to issue a dividend, buy back stock, invest in new equipment, pay back loans...or bring back the free coffee.
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Finance: What are normalized earnings?5 Views
Finance allah shmoop what are normalized earnings All right this
is norm or it's supposed to be We just couldn't
get the licensing rights from him So this is our
public domain version of norm from cheers Sorry And this's
normal that's a bell curve Yeah you're in the ebola
abatement business Each year the government spends a few bucks
on you Just keep you alive Is a business in
case Well you know a few hundred million peoples faces
start melting off like you know that scene in indiana
jones you know the good ones so your earnings are
usually here and here and here and here a buck
a buck twelve twenty three twenty four years I'm like
that But then one year after miss malaria's high school
biology class takes a field trip to study monkeys bats
and beetle crap in caves in central ghana Well your
business picks up So this year when the gove is
having to spend a fortune on ebola abatement you were
nine dollars and forty two cents a share And since
world awareness has suddenly shot up the most popular yahoo
search term index that thing well next year you'll still
learn five seventeen to share even though most the ebola
is pretty much gone now But then things quiet down
in life goes back to normal where your earnings are
you know normal and you could plot some kind of
line through them And if someone asked you what normalized
earnings are in your little ebola abatement company well you
could say that your normalized earnings are in about a
buck twenty Well fortunately making out with the nigerian fruit
bat is not normal so you probably don't have to 00:01:40.539 --> [endTime] worry about contracting ebola Ooh
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