Declining RevenueA negative revenue trend points to weakening top-line scale that can erode operating leverage over time. Sustained revenue declines reduce absolute gross profit capacity, limit funds for R&D and service expansion, and may signal competitive or demand pressures in key industrial end markets.
Negative Free Cash FlowPersistent negative free cash flow constrains the firm's ability to self-fund capex, service growth, pay dividends, or reduce debt. Even with operating cash quality, inability to convert earnings into positive FCF raises medium-term liquidity and strategic flexibility risks for investments or cyclical stress.
Margin And Return PressureDeclining EBIT margin and reduced ROE indicate weakening operational efficiency and lower shareholder returns. Combined with rising leverage, this trend can limit the company's capacity to expand margins via scale, and makes recovery slower if competitive or input-cost pressures persist.