It’s a good practice to know if you’re making money or not. The bottom line is a figure that represents your company’s net income. You calculate it by subtracting your total expenses from your total revenue.
If you get a positive number, you’ve made more money than you spent, also known as a profit. If you come back with a negative number, you’ve spent more than you’ve earned, also known as a loss.
By understanding your bottom line, you can make strategic decisions and decide if a current way of operating is working or if you need to change things up.