A few months back the people of my quaint New England town fought long and hard to keep out the ultimate evil: Monster Mart. "It'll kill little stores!" they cried. "It'll bring in criminals!! And worst of all, it'll bring in scheming, vicious, cutthroat capitalists!!!" They believed it was the devil's spawn, and so they struggled, called town meetings, remembered the Boston Tea Party, vowed never to surrender.

They lost.

Monster Mart cruised into downtown in all its splendor. Ooohs and ahhhs rose up from the townspeople, even from old Grandma Hagette. She may have fought tooth and nail to keep 'em out, but hey, once they were in she wasn't going to hold it against them. On opening day, I swear, they should have scalped tickets to the big event. I've never been to the Super Bowl, but this seemed bigger.

Hundreds of thousands flocked to the store. After all, who could resist a place that sold everything? And I mean everything: from dishwashers to computers to mocha coffee to Cisco 7000 routers to Tickle-me-Elmo dolls to Van Gogh paintings to stocks to mortgages to Giorgio Armani suits. Why, there were probably as many mannequins in there as there were inhabitants of the town. It was all peddled in the surgically clean store that probably rivaled Disney World in size. Folks, they even had an entire aisle stacked to the sky with tofu.

Seeing the utter magnificence of the concept, when I passed their Investment area, it took only one whisper from a man who called himself Mo-Mental for me to pick up their annual report. "Founded in 1982 MONSTER MART [NYSE: BIG] is revolutionizing the retail industry." An impressive statement backed up by sales growth of 200% last year! Sure, the cash flow was negative and debt was large. However, profit margins were 5%, and if I recalled correctly, that was pretty good for their industry. "The stock is set to touch the sky," I thought. "I'll be a millionaire!"

From the corner of my eye I saw a glimmer of movement in one of the DKNY mannequins. Her eyelid fluttered. Then her plasticized arms dropped gracefully to her sides, and she strode toward me. It was the motley-clad Ms. Motli Fool. Coming from her authoritative yet feminine voice were the words: "Not so fast, there, deary. It seems you over looked something about the company. There's a very good reason not to buy Monster Mart's shares."

*What problem did Ms. Motli Fool see in buying Monster Mart's stock?*

1. Retail company start-ups usually take years before their shares show a significant price rise.
2. The Super Bowl is actually a bigger event than Monster Mart grand openings.
3. Monster Mart's negative cash flow is a sign of trouble.
4. Margins are irrelevant in the retail industry.

The answer is number 3.

Cash flow is measure that tells an investor that a company is actually bringing cash in to the company's coffers. A company with negative cash flow may be in deep doo-doo. In order for such a company to expand, they often have to either issue more stock or take on greater debt. Issuing stock lessens the value of the shares that a person owns, and taking on debt actually ties up even more of a company's precious cash. Both are bad news for an investor. Ms. Motli Fool, luckily, saw that Monster Mart had negative cash flow and saved me from one potentially big investing mistake.

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