Revenue DeclineTop-line contraction signals weaker sales volumes or pricing in core products. Persistent revenue decline erodes scale economics, pressures operating leverage and margin sustainability, and reduces internal funding capacity for maintenance capex and strategic projects over a multi-month horizon.
Negative Free Cash FlowMaterial negative free cash flow points to a cash-generation shortfall relative to reported profits. If sustained, this limits the firm's ability to self-fund growth, dividends or project investments and increases dependence on external financing, raising execution and liquidity risk.
Declining Return On EquityA sharp fall in ROE indicates reduced effectiveness in converting equity into profits. Over time, a sustained ROE decline may reflect margin compression, lower asset productivity, or suboptimal capital allocation, weakening long-term shareholder returns and investment appeal.