Persistent Net Losses And Declining RevenueOngoing net losses and falling revenue erode capital and operational flexibility. Over a multi-month horizon this limits reinvestment, weakens customer and supplier confidence, and requires either sustained margin improvement or external funding to restore a viable growth trajectory.
Negative Equity And Extreme LeverageNegative equity and a highly unfavorable debt-to-equity profile indicate acute solvency and refinancing risk. This structural leverage constrains access to capital markets, raises cost of capital and increases the likelihood of covenant strain, limiting investment and recovery options.
Erratic Free Cash Flow GrowthInconsistent free cash flow undermines the firm's ability to delever, fund capex or sustain strategic initiatives. Over a 2–6 month horizon erratic FCF makes financial planning difficult, increasing reliance on short-term financing and elevating execution risk for operational fixes.