Net ProfitabilityInconsistent and declining net margins reduce retained earnings and constrain the firm's ability to self-fund growth or sustain dividends. Persistent weakness at the bottom line increases sensitivity to cost shocks and limits buffer against slower demand, impairing long-term financial resilience.
Equity Ratio DeclineA falling equity ratio signals erosion of the capital base and greater dependence on liabilities. Over time this raises financial risk, limits borrowing headroom, and can increase cost of capital, reducing ability to pursue investments or absorb downturns without deleveraging actions.
Revenue & EPS VolatilitySharp EPS contraction and volatile revenue trends point to earnings instability that undermines forecastability and planning. Such swings compromise capital allocation, increase refinancing and operational risks, and make it harder to sustain multi-month investments or long-term contracts reliably.