High LeverageA debt-to-equity ratio near 2.4 and low equity ratio constrains financial flexibility and raises refinancing and interest risks. Over the medium term, high leverage limits ability to fund capex, withstand demand downturns, or invest in product transitions without either deleveraging or external capital.
Negative Net ProfitabilityRecurrent net losses erode shareholder equity and signal challenges converting gross profits into bottom-line returns. Persistent negative net margins reduce retained earnings, hinder balance sheet repair, and force hard choices on cost cuts or asset sales to return to sustainable profitability.
Weak Free Cash Flow ConversionNegative free cash flow and poor free-cash-flow-to-net-income conversion point to difficulties funding operations and servicing debt internally. Over several quarters, weak cash conversion increases dependence on external financing, restricts strategic investments, and raises liquidity stress risk.