Declining Revenue TrendA multi-year revenue decline erodes scale and reduces fixed-cost absorption, making margins more vulnerable. Without a durable reversal in sales, the company risks reduced pricing power, weaker OEM negotiating leverage, and constrained ability to invest in product or capacity improvements.
Persistent Net Losses And Negative MarginsOngoing losses deplete equity and limit retained earnings for reinvestment. Negative profitability undermines creditworthiness, increases dependency on external funding, and forces prioritization of turnaround actions over growth initiatives until margins sustainably improve.
High Leverage On Balance SheetSignificant leverage raises refinancing and solvency risk, especially in a cyclical auto supply chain. High liabilities relative to equity reduce financial flexibility, increase interest burden, and amplify downside if cash flows weaken, constraining strategic options over months.