Severe Net LossesSustained, large net losses erode shareholder equity and limit reinvestment capacity. Over a multi-month horizon, entrenched losses make it harder to retain talent, invest in operations, or secure favorable financing, increasing the risk the company must dilute equity or curtail activities.
Collapsing RevenueA dramatic decline in revenue undermines scale and operating leverage, worsening unit cost absorption and fixed-cost burdens. Unless demand or contracts recover, collapsing top line makes margin recovery difficult and raises the probability of structural restructuring or asset sales within months.
Negative Operating And Free Cash FlowNegative operating and free cash flow indicate the company is burning cash from core operations and cannot self-fund investment or obligations. This persistent cash burn increases reliance on external financing and raises short-term liquidity and solvency risk absent credible cash preservation plans.