Declining ProfitabilityMaterial margin deterioration reduces the company's ability to generate internal funds and undermines return metrics. Sustained margin pressure impairs reinvestment capacity, weakens ROE, and may reflect structural pricing, cost or competitive issues that limit long-term profitability.
Negative Free Cash FlowTurned-negative free cash flow driven by higher capex and weaker operating cash generation increases reliance on external financing. Over time this can constrain project funding, raise financing costs, and limit ability to sustain dividends or invest in growth without diluting shareholders.
Sharp Revenue And EPS DeclinesSteep declines in revenue and earnings suggest demand or execution shortfalls that reduce scale economics. Loss of top-line momentum hurts fixed-cost absorption, bargaining power with suppliers, and long-term margin recovery, making sustained profit improvement more challenging.