Negative Free Cash Flow From High CapexPersistently negative free cash flow driven by large capex can erode liquidity and force external financing. Over a 2-6 month horizon, continued negative FCF risks constraining dividends, buybacks or discretionary investment if capex does not translate into higher operating cash generation.
Declining Net Profit MarginA falling net margin, even from strong gross margins, signals rising operating expenses, interest costs or lower other income. If persistent, it reduces retained earnings and the company’s ability to self-fund growth, weakening long-term profitability resilience.
Increase In Total Debt NotedAn uptick in total debt, despite current low leverage, increases future interest and refinancing risk. If debt growth continues, it could constrain strategic flexibility and pressure coverage ratios during slower retail cycles across the next several quarters.