Keep the Shop OpenFirst look at the "net cash flow from operations" number, which is probably the most significantnumber on the statement. It tells you whether the company can afford to run its day-to-day business, says Ed Ketz, associate accounting professor at Penn State University. Net operating cash is basically all the money a company collected from its paid sales (not the stuff still sitting in the accounts-receivable account), less the cash it needs to keep the front door open. Clearly, you're looking for a positive number. If it's red, put on your skeptic's hat. Compare it with the prior period and the year-ago period. "There's really no need to crunch anynumbers yet; just eyeball it and get a sense of the trend," says Dan Noll, director of accounting standards at the American Institute of Certified Public Accountants. If you see some sort of steady or positive trend, then you can take comfort that the companycan probably afford its affairs. But be skeptical of big pops or one-time items, such as tax refunds,which are also reported in this section. We all know that you can't depend on getting a taxrefund every year. Also be cautious of "net cash from discontinued operations." It's basically the cash (or lossof cash) from a part of the business that has been discontinued, but is still running. So, that segment is not completely shut down or sold, but it will be soon. So if that division is making money, know that it's going to go away. If it's been losing money, then disposing of it will help the company increase operating cash once it's shut down. If net operating cash is negative or decreasing, dig harder. What's going on? If it's a start-up, then the company may be using cash to get the business off the ground. But if it's an established company with decreasing operating cash, that could be a sign that sales are slumping or that things are not being properly managed.