Declining Revenues And Net LossesA sustained decline in revenues coupled with recurring net losses erodes scale and weakens the firm’s ability to absorb fixed costs. Over 2-6 months this reduces reinvestment capacity, risks margin compression, and makes recovery dependent on structural demand improvement or material cost/price restructuring.
Negative Operating Cash FlowPersistent negative operating cash flow undermines the company’s internal funding ability, forcing reliance on external financing or asset sales. This is a durable vulnerability that pressures liquidity, limits capital expenditures for modernization, and raises execution risk for growth initiatives.
Negative Return On EquityNegative ROE reflects that the company is not generating returns on shareholder capital, signaling capital allocation or profitability problems. Over months this can hinder investor support, constrain access to low-cost capital, and limit the ability to rebuild equity via retained earnings.