You're walking down Main Street when you come across that home electronics superstore your parents always warned you about. As fate would have it you happen to be strolling by during the one hour of the day when they are actually closed. Still the sea of television sets are staring back at you and Small Street Weak is on the air. You press your face against the glass, another nasty habit your mother warned you about, and find yourself quickly mesmerized by the guest analyst for the evening, none other than The Talking Head. Like Lorelei calling ships further into the ocean blue you are under his spell.

"Buy gold stocks," he shouts with a clenched fist running through his hair.

"Buy gold stocks" you parrot.

"Sell high tech companies!"

You repeat that one a few times, lightly tapping your head on the store window to accentuate the phrase.

"But above all, short the living daylight out of URBAN ZOO [Nasdaq: UZOO]," he says with a sinister smile. "Get this, the company has a market cap of $400 million but only had $50 million in sales last year."

You look past the television screens and see a display case full of cellular phones. If only the store was open you could run in and call your broker for the perfect short sale. You drool and it slides down the storefront glass and just before it hits the pavement it lands on the left shoe of Sir Motley Fool.

You apologize as you pry your face from the window and search your empty pockets for a handkerchief.

"That's quite alright," he says as he removes his shoe and tosses it into a nearby garbage bin. "Those glazed eyes and my soggy ex-shoe make it appear as if you have come across the monster of all stock picks."

"Yes, he told me to short Urban Zoo," you say motioning to the television sets unaware that the show has ended and you are crediting your excitement to a singing purple dinosaur.

"That's all fine and dandy but I am sure you will now do a little research of your own to come to your own conclusion, right?"

"Who needs that! The Talking Head said UZOO was selling at 8 times sales," you say, raising your eyebrows as if your quick math will impress the one shoe sleuth.

"Well, that is quite high but that in of itself means nothing if you don't know the company's enterprise value or future revenue projections."

Your puzzled face inspires Motley to continue his explanation.

"You see Urban Zoo has $160 million in debt-free cash so its enterprise value, which is the debt-adjusted market cap of a company is actually $240 million."

"Woah," you say taken aback as you spit out some chewing gum that had been housed in your mouth for far too long. "I thought Enterprise Value was what Starfleet had to pay whenever Captain Kirk blew up his own ship."

"Not quite, enterprise value is important since it not only adjusts the valuation of a cash rich company but it also puts a highly leveraged company's market cap into proper perspective."

Motley shifts his weight to his bare foot, then back to the right, and in the process steps on your Wrigley remnants. He looks down, mutters "Gum... Shoe" and laughs as he tosses that shoe away as well.

"You know what," Motley continues. "That still makes for a high valuation until you consider that estimates call for the company to report sales next year in the $300 million range after $130 million this year. Your analyst friend was too busy adjusting that rear-view mirror again."

Putting your human calculator skills, which never landed you a prized prom date or your own sitcom, to work you figure that Urban Zoo is actually trading at an enterprise value that is:

1) more than 4 times next year's sales projections

2) 2 times next year's sales projections

3) 1.2 times next year's sales projections

4) 0.8 times next year's sales projections

Bust a Move! The correct answer is #4 since Urban Zoo, with their enterprise value of $240 million is selling at 0.8 times the 1998 sales projections of $300 million.

"Motley, thank you!"

"My pleasure is your gain," he says and begins to walk away.

"Don't go, I need you," you cry out.

"But Dorothy, you've had the power all along," he says getting further away.

You are not quite sure why he is calling you Dorothy or why you are suddenly wearing red glass slippers but just before he fades down the street you see that your old shoes are now on the feet of Motley Fool. You race to the garbage bin where you find his old pair of shoes. You remove the slippers, they never suited you anyway, and try on the Motley Fool pair. Stringy gum on one, moist residue on the other, the shoes are a perfect fit as you know, in a strange way, you will never walk alone again.

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