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A penny saved is a penny earned. That was true in Ben Franklin's day, and for most of us it still holds true.

But it doesn't hold much water on Wall Street, for a variety of reasons.

We're into the period where companies report their second quarter earnings, and it comes against a backdrop of corporate accounting scandals. Can you really believe the numbers being reported? With all the attention being paid to earnings per share, we may be missing the big picture. One of our roundtable guests this past Friday, Jean Marie Eveillard, gave us good guidance as to what he thinks is important, namely, cash flow.

Our other roundtable guest, Howard Schilit, gave us some red flags to look for when considering investing in a company. How does a company make its money? How does the company grow? If it's only through acquisitions, beware. And Howard echoed Jean Marie in saying "look at the cash flow versus reported profits"

But until we all go through some sort of epiphany, it's earnings per share, or EPS, that drives the stock price, and investor interest. You may hear it called "bottom line growth," but it all amounts to the same thing: profits divided among shareholders, or earnings per share.

And we as investors have become quite accustomed to double-digit EPS growth; in fact we demand it, and punish companies that fall short. We have EPS estimates, then the "whisper" number, one that is literally whispered among analysts and shareholders as the "real" number to expect. And when a company matches its estimate or whisper number, it's "sell the news," since the price of the stock in question usually ran up in anticipation, in what is called the "buy the rumor" behavior.

It's this kind of expectation level that may make some otherwise honest executives fudge the numbers, especially if their compensation is tied to that bottom line number.

The bottom line can only grow in a few ways:

• Increasing revenues or "top line" growth.
  
• Cutting costs (generally this means cutting labor costs; that is, firing people).
  
• Buying another company and including its assets in the acquiring company's bottom line.

We've seen what growth by acquisition can do to a company's stock price. Just look at Tyco International. We saw the excesses of mergers and acquisitions activity in the 1980s spawn an "irrationally exuberant" stock market of the '90s. To match that pace of growth in the new millennium, companies had to cut costs.

We've gone through much of the labor bloodletting. Remember this old joke? "A recession is when your neighbor is unemployed, a depression is when you're unemployed"

Not a lot of laughter now.

Intel, the world's largest chipmaker, on Tuesday reported improved earnings per share, thanks to lower acquisition costs; the company also said it will lay off 4,000 employees or 4.8 percent of its workforce, to cope with weak demand for personal computers. Boeing has cut nearly 30,000 jobs in response to the fall off in air travel after Sept. 11. Challenger, Gray and Christmas, the executive placement firm, reported a total of 735, 527 jobs lost in all industries since Jan. 2002. One-third of those cuts came from technology industry, led by telecommunications companies.

But what of productivity gains? Those gains come from fewer people doing more work. With increases in productivity, a company can produce more for the same cost, or the same amount of goods for less. What we've experienced is the latter, cutting costs and labor in an effort to tread water.

So when these titans of industry report tepid earnings (but profits nonetheless), keep in mind the pain what Main Street has had to endure to meet those investor expectations. And keep in mind that companies will never get back to that "top line" or revenue (sales) growth if Main Street can't or won't buy.

It's a vicious circle. A person out of work, or feeling less wealthy due to the stock market's decline, won't spend as much money as before, and that will hurt corporate bottom lines, fueling the current death spiral of the stock market.

But if we lower our expectations for EPS and start looking at other things besides earnings per share -- rewarding firms for good business practices as well as good products and services -- the top line will grow. That growth will translate into new jobs, which will increase spending and filter its way to the bottom line.

This economic recovery is modest at best. We run a real danger of returning to "negative growth" or a recession if Main Street stops buying. What Wall Street needs to recognize is a penny spent is a penny earned.

With interest rates at 40-year lows, it's time for Corporate America to make some capital expenditures for plant and equipment, create jobs for those out of work on Main Street and return to the tried and true methods of growing a company, increased sales. Then maybe we won't have to worry about fudged numbers and cooked books. There will be no reason to lie to employees or shareholders. And we might find the stock market pulling itself out of its dizzying decline.