Reasons Why Business People Focus on the Bottom Line Business Essay (Essay Sample)

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Reasons Why Business People Focus on the Bottom Line
The cardinal objective of every business is to remain profitable. The bottom line of the income statement provides crucial information on key elements of profitability which include the inventory velocity, expenses, margins, and sales. The quality of the bottom line speaks volume about the growth prospects of a business. A healthy bottom line is indicative of the market competitiveness of a company (DeBonis et al. 2). Similarly, an unhealthy bottom line suggests a company has an unsustainable business model and a weak market performance. Business people focus on the bottom line because it is a crucial indicator of the market performance and growth index of their businesses.
Business people use the bottom line as the yardstick for determining the net earnings and profitability of their ventures (Ulrich and Smallwood 2). High profits margins and low expenses demonstrate a healthy bottom line. Favorable bottom lines enable business people to judge the sustainability of their business practices