Declining Operating Margins (EBIT/EBITDA)Falling EBIT/EBITDA margins point to higher operating costs or diminishing operational efficiency. If persistent, this can erode operating leverage from revenue growth, limit reinvestment capacity, and pressure profitability metrics used to fund long-term initiatives and R&D investment decisions.
Negative Free Cash Flow In Latest YearA negative FCF outcome driven by elevated capex reduces internal funding for operations and strategic projects. Over months this can necessitate external financing or slower investment, constraining the company’s ability to scale manufacturing, expand channels, or support ecosystem initiatives without higher financing costs.
Rising Total Liabilities Need MonitoringAn increase in liabilities, even with strong equity, raises medium-term liquidity and covenant risks if operating cash conversion weakens. Continued liability growth could restrict strategic flexibility, increase interest exposure, or force tougher capital allocation choices during slower revenue periods.