Weaker Cash ConversionDeclining operating cash flow and a drop to ~0.51 coverage of operating profit indicate working-capital or timing stress. If persistent, weaker cash conversion increases variability in free cash flow, constraining reinvestment, debt servicing flexibility, and sustainable shareholder returns.
Margin Compression RiskEroding gross and net margins point to rising input costs, pricing pressure, or mix shifts. Structural or prolonged margin compression would reduce operating leverage, lower ROE and cash generation, and limit the firm's ability to fund growth or maintain return-focused capital allocation.
Increase In Absolute Debt Since 2023A shift from zero debt to a positive absolute debt balance introduces new fixed obligations and refinancing risk. Even with low leverage today, the change in capital structure could raise interest sensitivity and reduce optionality if macro rates rise or cash flows weaken.