Negative Net Profit MarginA negative net margin shows the company currently cannot convert strong gross profit into net earnings. If sustained, this undermines retained earnings accumulation, reduces reinvestment capacity, and signals structural cost or pricing issues that must be resolved for long-term financial health.
Weak Cash Flow GenerationPersistent negative operating and free cash flow indicate core operations consume cash rather than generate it. This limits the firm's ability to fund growth, service debt, or invest in product development without external financing, elevating medium-term solvency and execution risk.
Rising Leverage And Negative ROEAn increased debt ratio combined with negative ROE reflects capital inefficiency and higher financial risk. Greater leverage raises interest burden and reduces strategic flexibility, while negative ROE indicates shareholder capital is not generating returns, undermining long-term resilience.