Health and Stamina
Health is the key to every battle. You can see this indicated in red below the item selection pane when in combat. Stamina governs what attacks you can perform while in combat. For example, the Needle Gun that you start the game with, costs 9 Stamina for each attack.
How to Get Health:
You can recharge your Health by equipping the relevant items from your Supplies menu. Purchase these before battle so that you are not left short of Health if you come up agaisnt tougher enemies.
How to get Stamina:
When you run out of Stamina, you can either choose to lose a turn recharging it, which obviously can be disastrous in the course of a battle, or use a Stamina Boost Pack from your equipment inventory menu.