Negative Free Cash FlowSharp negative free cash flow is a durable concern: it constrains internal funding for capex, dividends or debt reduction and forces reliance on external financing. Persistently negative FCF can erode balance-sheet flexibility and raises capital-cost and refinancing risk over months.
Poor Cash ConversionEarnings not converting into operating cash suggests working-capital strain or non-cash earnings drivers. Over time this undermines the quality of reported profits, increases liquidity risk, and may necessitate tighter receivables/inventory management or external funding to sustain operations.
EBIT Margin PressureA declining EBIT margin signals rising operating expenses or less favorable product mix, which can steadily erode profitability if not corrected. Structural cost increases in SG&A or distribution will pressure long-term returns unless offset by pricing, efficiency gains, or higher-margin sales.