SKILL UP! 7IN CONTEXTWHAT’S THE BOTTOM LINE?
Financial English
In an income statement, the
bottom line is the final line that
shows total profit or loss. This
statement has the sales at the
top, as total revenue, followed
by all expenses. After reductions,
any net income is transferred to
retained earnings or issued to
shareholders as a dividend.
Business English
We use bottom line to refer
to the most important fact in a
situation: “The bottom line is he
stole from the company.”Phrase Bank
For a list of all the key phrases used in
the dialogues, see pages 12–13 The SiTuaTion:
Ron and Sue discuss both
good and bad accounting
practices.- Tell the truth
Ron: Start-ups contact us because
they need to raise funds. For every
stage of funding — from seed cap-
ital to IPO. Throughout, it is our
responsibility to ensure that no
statement is misleading.
Sue: In my experience, it’s com-
mon that small companies inflate
earnings by recording normal ex-
penses as capital expenditure. It’s
an easy way to manipulate the bal-
ance sheet. Window dressing, you
might say.
Ron: Any others?
Sue: Serious accounting irregular-
ities include recording unrealized
revenues or even fake transactions.
inflate sth. , etw. aufblähen
window dressing , Schönfärberei- Lessons from bankruptcy
Ron: I saw that you also worked
for a company that went bankrupt.
What happened there?
Sue: Bad management, too much
inventory and low turnover. We
went bust. Basically, excess inven-
tory ruined the bottom line.
bottom line ifml. , Endergebnis; Saldo
bust: go ~ ifml. , pleitegehenIllustration: Bernhard Förth