Declining Revenue TrendA multi-year revenue decline signals structural demand weakness or loss of market share, reducing scale benefits. Persistently lower top-line constrains margin recovery, capital allocation, and ability to cover fixed costs, thereby undermining medium-term profitability and strategic flexibility.
Weak Operating Cash FlowNegative operating cash flow and falling free cash flow are durable red flags: they weaken liquidity, force reliance on external financing, and can curtail necessary capex and plant upkeep. In a capital-intensive industry, sustained cash deficits raise solvency and competitiveness risks.
Persistent Negative Margins And LossesOngoing negative net, EBIT, and EBITDA margins indicate structural cost or pricing issues that impair returns. Persistent losses erode equity and limit reinvestment, making it harder to lower costs or compete on pricing without a fundamental operational turnaround.