What is the top line?
The top line is a financial measure referencing a company’s gross figures, primarily revenue or sales. It derives its name from its position on a company’s income statement – literally the top line.
Subsequent items listed below the top line figure are deducted as expenses or losses. Businesses that increase sales or revenue generate top line growth.
Many businesses use financial analysis software to monitor financial performance, generate reports to visualize data, and deliver financial statements.
What does the top line reveal?
The top line indicates how effective a company is at generating sales and revenue, which can be useful in ascertaining the organization’s financial strength. The top line doesn’t take operating costs into consideration. To understand how efficient a company is with its spending and operations, businesses should look at the bottom line instead.
Top line best practices for growth
To increase top line growth, companies must focus on growing sales and revenue. Below are best practices to follow to find more customers and generate more sales:
- Identify unique selling points. Securing new customers involves understanding what its competitors have to offer. Sales teams should focus on crafting pitches that set their organization and its products or services apart from the competition.
- Deploy a targeted messaging strategy. Businesses that use targeted messaging and tailored campaigns for new and prospective customers are more likely to generate sales. To do this effectively, sales representatives seek out ideal customers rather than cold pitching a broader audience.
- Build a referral program. Creating a formalized referral, partner, or reseller program allows businesses to reach new customers through a trusted source. These programs can increase top line growth and bring in net new business.
- Expand into new markets. To reach a new customer base, businesses should consider expanding into new markets by offering innovative products and services tailored toward the market.
Top line vs. bottom line
The top and bottom lines are significant figures on a company’s income statement, but they represent different aspects of the business. The top line refers to a company’s gross revenue or sales before subtracting operational costs. The bottom line refers to the company’s net income after deducting expenses from the top line.
Need more information about your top line? Learn how to do a financial analysis to determine performance.
