Declining Revenue And Negative ProfitabilityFalling top-line and a negative net margin indicate the business is contracting while failing to cover costs. Persisting revenue decline erodes economies of scale, pressures gross and operating margins, and hampers reinvestment capacity, threatening long-term competitiveness if trends continue.
Persistent Negative Operating And Free Cash FlowSustained negative operating and free cash flow create liquidity pressure and force reliance on external financing or equity raises. This constrains capital allocation to marketing, inventory, and product development, limiting the company's ability to execute strategic growth initiatives over the medium term.
Balance Sheet Deterioration And LeverageModerate-to-high leverage coupled with falling equity and assets reduces financial flexibility and increases refinancing risk. A thinner equity buffer limits resilience to revenue shocks and could raise funding costs or constrain strategic investments, weakening long-term stability.