In accounting, net cash refers to the amount of physical and tangible money that the organization has been able to generate in a specific accounting period. Mostly, this cash is gotten from the core business of the company and is paid upfront and physically. The account is important because it tells a distinct story about the cash-flow of the organization which is necessary if the organization is to operate daily. However, it tells such a small part of the story and could be beneficial to the organization yet misleading if interpreted wrongly.
Net income on the other hand is the amount of revenue that the company has been able to generate in the specific period of business. It is not always that clients will pay cash upfront and it thus makes sense to use income at times instead of cash. Income could include all the monies paid via the banks, any depreciations and other similar expense. These might not exactly be cash-based transactions, but they are still legitimate and affect the value of the company. It is also important to note that cash is included in the income and vice versa.
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The income of the company is equal to its profit or loss. The reason is that net income is arrived at by taking all of the revenue that the business has generated at that specific period and subtracting the expenses that were incurred then. These expenses should include even those that did not necessarily mean producing cash to pay for such as depreciation expenses. Despite their varying importance, it is important to note that they are both necessary when running an organization, be it cash-based or not.
