Rising Debt LevelsAn upward trend in total debt raises leverage and interest obligations, which can constrain strategic flexibility and heighten refinancing risk. If cash flow weakens, rising debt may pressure liquidity and limit the company’s ability to invest in long‑term projects or respond to industry shifts.
Free Cash Flow VolatilityVolatile free cash flow and a prior negative operating cash flow create uncertainty around sustainable internal funding. This variability can force reliance on external financing, increase funding costs, and weaken the firm’s capacity to consistently fund R&D, dividends, or strategic partnerships.
Gross Profit Decline / Cost PressureA declining gross profit signals emerging cost or pricing pressure that can erode durable margins. If unchecked, this could compress EBITDA and net margins, forcing pricing moves or cost cuts that may impair competitive position or slow product investment over several quarters.