Very High LeverageExtremely high debt relative to equity materially limits financial flexibility and raises default risk if earnings falter. A thin capital cushion increases vulnerability to interest-rate moves or working-capital stress and constrains strategic initiatives like M&A or large capex.
Consistent Free Cash Flow DeficitPersistent negative free cash flow means the company burns cash after investment, forcing reliance on external financing or asset disposal. Over time this limits the ability to de-lever, build reserves, or fund growth organically, increasing refinancing and liquidity risks.
Bottom-line Losses PersistDespite operating gains, continued net losses indicate significant non-operating costs (interest, write-offs) or volatility in margins. Ongoing losses prevent retained earnings buildup, keep equity thin and reduce capacity to absorb shocks or return capital to shareholders.