The Cash Basis Net Income Formula is the calculation used to determine a company’s net income based on the amount of money that is actually received or paid in cash. This method of accounting is widely used by businesses to measure their current financial performance, analyze their profit and loss, and make decisions such as investments or expanding operations. To calculate using the Cash Basis Net Income Formula, start with your gross income, then subtract any expenses you paid out in cash, such as taxes and other costs associated with running your business. Once all expenses have been deducted, the result is your cash basis net income. Knowing this figure allows a business to assess its overall financial state and plan for the future.