High LeverageElevated leverage increases interest burden and reduces financial flexibility over the medium term. In a cyclical industry like textiles, high debt magnifies earnings volatility, constrains capital allocation, and raises refinancing risk if cash flow underperforms or credit conditions tighten.
Declining RevenuesA material revenue decline erodes scale economies and pressurizes margins and fixed-cost absorption. Sustained top-line contraction can force margin compression, reduce bargaining power with suppliers/customers, and make it harder to rebuild cash flow and profitability without structural demand or market-share gains.
Weak Free Cash Flow & Cash ConversionPersistent negative free cash flow and poor cash conversion impair the company's ability to reduce debt, invest in efficiency, or buffer downturns. Reliance on external financing to cover capex or working capital increases cost of capital and elevates solvency risk over the medium term.