Declining Revenue And MarginsSustained declines in top-line and gross margins erode scale economics and pricing power, making it harder to cover fixed costs and invest in growth. If structural demand or competitive pressures persist, margin compression could become entrenched and impair long-term competitiveness.
Negative Free Cash Flow And ProfitabilityNegative free cash flow alongside losses reduces internal funding for projects, R&D and working capital. Persistent cash deficits force external financing, elevate refinancing risk and constrain strategic investments, weakening the firm's ability to execute longer-term growth plans without raising expensive capital.
Declining Shareholders' Equity And Equity RatioA shrinking equity base reduces the firm's buffer against losses and can increase leverage ratios even absent new debt. Over time this limits borrowing capacity, raises cost of capital, and may curtail the company's ability to pursue large infrastructure contracts or invest in strategic innovation.