Negative EquityLiabilities exceeding assets creates structural solvency risk and constrains financing options. Negative equity forces reliance on external capital or asset sales, increases refinancing risk over months, and can trigger creditor pressure or covenant issues that materially limit strategic flexibility.
Very Weak MarginsExtremely low gross margin and deep operating losses indicate the business is not covering basic costs. Without structural cost cuts or pricing power, losses will persist, undermining cash generation and making sustainable profitability unlikely over the medium term despite revenue growth.
Poor Cash GenerationSeverely declining free cash flow and minimal operating cash conversion of earnings mean the company cannot self-fund operations or investment. Over a 2–6 month horizon this raises default or liquidity risk, necessitates external funding, and limits ability to execute growth or margin-improvement initiatives.