Negative Operating Cash FlowPersistent negative operating cash flow is a structural red flag for a developer: operations are not self-funding. Over months this forces reliance on external financing or asset sales, raises funding costs, and constrains the company's ability to start or complete projects without additional capital.
Unprofitable Core OperationsNegative EBIT and net income margins indicate the company currently loses money on core activities. Sustained unprofitability erodes retained earnings, limits reinvestment, and can force strategic adjustments or capital raises that dilute returns and prolong recovery timelines.
Revenue And Profit VolatilityExtreme revenue volatility—large spikes but inconsistent profitability—impairs forecasting, creditworthiness and stakeholder confidence. For real estate developers, predictable cash flows are crucial; volatility raises execution risk and increases the effective cost of capital over time.