High Leverage And Debt BurdenSignificant leverage elevates refinancing, interest-rate and solvency risk. Over several months, elevated debt service limits financial flexibility to invest or absorb shocks; with constrained cash flow, leverage materially raises the probability of liquidity strain or costly capital needs.
Negative Operating And Free Cash FlowsPersistent negative operating and free cash flows indicate the business is not converting earnings into cash. This undermines internal funding for capex, debt servicing and growth; absent turnaround, the company will need external financing or asset actions, increasing structural financial risk.
Volatility In Operating Margins (EBIT/EBITDA)Fluctuating EBIT/EBITDA margins point to sensitivity to cost, mix or pricing shifts. With limited cash cushions and high leverage, such volatility can quickly compress free cash flow and impair the company's ability to meet obligations or invest consistently over the medium term.