Cash Basis Net Income is a measure of the profitability of a business that focuses solely on cash transactions. It doesn’t take into account the impact of accrual-based expenses or revenue, such as accounts receivable or prepaid expenses. It’s calculated by taking the amount of cash received for goods and services, subtracting any costs that were paid in cash, and dividing the result by total sales. Cash basis net income can be used to measure the performance of a business over a period of time, helping to make important decisions about how to allocate resources.