Declining RevenuesA multi-period decline in revenue erodes operating scale and weakens the company’s ability to cover fixed costs. Sustained top-line contraction limits reinvestment capacity, magnifies margin pressures, and makes recovery dependent on sustained volume gains or improved commodity realizations.
Negative Equity / High LeverageNegative shareholders' equity signals balance-sheet strain and potential solvency concerns. High leverage restricts access to capital, raises refinancing risk, and increases likelihood of asset sales or dilution to shore up funding, undermining long-term financial flexibility and strategic options.
Persistent UnprofitabilityMaterial negative net and operating margins indicate the business is not covering full cost structures. Prolonged losses deplete liquidity, limit capacity to invest in production growth, and increase reliance on external funding, reducing resilience to commodity or operational setbacks.