Negative Operating Cash FlowPersistent negative operating and free cash flow erodes liquidity and forces reliance on financing or equity raises. Over a multi-month horizon this constrains reinvestment in sales, R&D, and onboarding, and increases execution risk if cash generation doesn't turn positive or external funding conditions tighten.
Ongoing UnprofitabilityContinued operating losses indicate the company hasn't yet converted revenue growth into sustainable profits. Over time this can pressure margins, reduce retained earnings, and require repeated capital injections; resolving structural cost issues is essential for long-term financial health.
Declining Equity RatioA falling equity ratio reduces the asset backing provided by shareholders, weakening balance-sheet resilience to shocks. If the trend continues, it narrows borrowing capacity and raises the cost of capital, making strategic investments or M&A more difficult without dilutive financing.