High Financial LeverageElevated debt levels constrain financial flexibility and increase refinancing and interest-rate exposure. Over several months, high leverage limits the company's ability to fund growth organically, raises default risk if cash flow weakens, and forces reliance on external financing.
Negative Free Cash FlowPersistent negative free cash flow undermines the company's capacity to invest, deleverage or return capital without external funding. This structural cash shortfall increases liquidity risk and makes the business more vulnerable to funding cost rises or reduced access to capital markets.
Declining Gross And Net Profit MarginsEroding gross and net margins point to rising costs or pricing pressure that impair the conversion of revenue into profits. If sustained, margin compression will reduce reinvestment capacity and returns to shareholders, making it harder to finance growth or pay down leverage.