High LeverageA 1.74 D/E reflects material leverage that raises interest and refinancing risk. Over months this can constrain capital allocation, increase vulnerability to demand shocks or rate moves, and limit management's ability to invest in product, marketing, or supply-chain improvements.
Negative Free Cash FlowNegative FCF and weakening cash conversion mean reported profits are not becoming usable cash. This structural cash shortfall limits debt repayment, capex, and working-capital funding, forcing reliance on external financing and increasing liquidity and execution risks over the medium term.
Shrinking Net MarginA declining net margin despite revenue growth signals rising costs or operational inefficiencies. Persistently thin net margins reduce the firm's buffer against cost shocks, limit retained earnings for reinvestment, and weaken sustainable profitability over the coming quarters.