Top line

Definition

The revenue line at the top of an income statement, before any costs.

Why It Matters

It is the number a seller leads with and the one a buyer prices last. Revenue says how much money moves through the business and nothing about how much stays, so two shops with the same top line can be worth three times different amounts. Read it for direction and for concentration, then go straight to the earnings line. The gap between the two is the whole question, and a seller who talks only about revenue growth is usually steering the conversation away from margin.

In numbers: A route business turning over $2,400,000 with $310,000 of SDE runs a 13% margin; the same $310,000 earned on $900,000 of revenue is 34%, and the two do not trade alike.