High LeverageSignificant leverage reduces financial flexibility and raises refinancing and interest-cost risk. Over several months higher debt service constrains investment in R&D or sales, increases vulnerability to rate moves, and can force defensive actions if cash flows falter.
Weak Cash GenerationNegative free cash flow trends limit the company's ability to self-fund growth, R&D, or debt reduction. Persisting cash deficits over months increase reliance on external financing, raising execution risk and potentially diluting shareholders or constraining strategic initiatives.
Negative Operating ProfitabilityNegative EBIT and net margins indicate structural issues converting revenue into profit. Without sustained margin improvement, top-line growth may not translate to shareholder value; prolonged losses can erode equity and limit reinvestment capacity over the medium term.