Revenue and Profit

Topline, bottomline, and what's between.

Every income statement starts with revenue, the total money from sales. Sitting at the top, it's the topline. From it, the company pays costs, interest, and tax. Whatever's left at the very bottom is net profit, the bottomline: the money that belongs to shareholders. Net profit (bottomline) = Revenue (topline) − all costs A company sells Rs 1,000 of goods (topline). After Rs 600 costs, Rs 200 interest, Rs 50 tax, it keeps Rs 150 net profit (bottomline). Why both matter Topline growth shows more selling. But a growing topline with a shrinking bottomline is a warning. The company is selling more while keeping less. Healthy companies grow both, with profit rising at least as fast as revenue. Sales momentum (topline) What owners keep (bottomline) Rising or falling efficiency Topline alone hides thin profit One-offs distort the bottomline Ignores debt and cash timing

Part of Learn NEPSE Investing, a free course on reading Nepali company accounts and charts. Section: The Basics.