Severe Revenue DeclineSteep, sustained revenue declines indicate weakening market demand, lost contracts, or execution issues. Over several months this erodes scale economics, reduces bargaining power with suppliers and tenants, and constrains reinvestment ability, making recovery dependent on clear operational fixes or new revenue sources.
Weak Capital StructureNegative shareholders' equity and heavy leverage signal a fragile balance sheet that limits financial flexibility. Over the medium term this raises refinancing risk, increases cost of capital, and could force asset sales or dilutive capital raises, constraining strategic investments and growth initiatives.
Deteriorating Cash GenerationA drastic fall in free cash flow growth and weak conversion of net income into operating cash flow undermine the company’s ability to service debt and fund operations internally. Persisting cash deficits create structural liquidity pressure and increase reliance on external financing.