Margin Erosion Across Income StatementDeclining gross, EBIT and net margins point to rising costs or price pressure that reduce operating leverage. Persisting margin erosion undermines long-term free cash generation and return on invested capital, constraining reinvestment and reducing resilience to competitive or input-cost shocks.
Negative Free Cash FlowNegative free cash flow is a structural concern: it limits the company's ability to self-fund capex, pay down debt, or return capital. Over months this may force external financing or deferment of strategic investments, raising liquidity and execution risk if negative FCF persists.
Declining Returns On EquityA falling ROE suggests lower effectiveness in converting equity into profits, possibly from margin pressure or capital intensity. Structurally, this weakens investor returns and may signal inefficient capital allocation or the need for operational improvement to restore long-term profitability.