Prime objective of this article is to discuss on Significance of Gross Margins and Cash Flow. There are more cases of buyers losing their shirts buying most of these stocks than there usually are success stories of large winners. Gross margins and cashflow are two vital metrics to check out when analyzing early-stage corporations. Another reason increasing gross margins are important is due to research and development. Early-stage corporations, especially in the biotech in addition to technology sectors, need money to purchase R&D, which is the lifeblood of a young company. Here also briefly explain on Profit Margins and Cash Flow.