Declining Free Cash FlowA significant drop in free cash flow constrains financial flexibility to reinvest, pay down debt, or increase shareholder returns. Persisting FCF declines can force trade-offs between marketing, channel funding and maintenance capex, weakening medium-term growth execution.
Low Net Profit MarginA low net margin despite healthy gross and EBIT margins suggests non-operating costs or tax/interest pressures that limit retained earnings. Over time this constrains the company’s ability to build reserves, fund strategic initiatives, or improve ROE during slower demand periods.
Decreasing EBITDA MarginsFalling EBITDA margins point to rising operating cost intensity or higher non-cash charges, reducing underlying operating leverage. If sustained, this erodes cash flow cushion and competitiveness unless offset by sustained pricing power or structural cost efficiencies.