Negative Shareholders' EquityNegative equity means liabilities exceed assets, leaving little to absorb shocks and restricting financing options. Over months this raises solvency risk, increases cost of capital, and limits strategic flexibility for investments or capital expenditures, threatening long-term operational continuity.
Chronic Negative Operating Cash FlowPersistent negative operating and free cash flow forces reliance on external financing and curtails reinvestment. Over a 2-6 month horizon this reduces capacity to maintain plants, invest in efficiency, or fulfill contracts without dilutive funding, increasing liquidity and execution risk.
Declining Revenue And Deteriorating MarginsFalling sales combined with negative gross and operating margins reflect structural cost inefficiencies or pricing pressure. Continued margin deterioration undermines profitability, erodes capital reserves, and limits the company's ability to compete, invest, or absorb commodity price swings over the medium term.