High LeverageA high debt-to-equity ratio raises structural financial risk: higher interest and principal obligations constrain cash available for growth, increase refinancing risk, and limit strategic flexibility. Over months this leverage can magnify weakness if revenue or margins fluctuate.
Weak Cash GenerationNegative operating and free cash flow indicate the business currently fails to generate sufficient cash from core activities. Persisting cash deficits force dependence on external financing, limit reinvestment, and elevate default or dilution risk unless operational cash conversion improves.
Declining ProfitabilityFalling EBIT/EBITDA and a sharply negative EPS growth rate signal structural margin pressure from cost or pricing dynamics. Sustained margin deterioration reduces retained earnings, impedes self-funding of growth, and weakens long-term return prospects absent material efficiency gains or pricing power restoration.