Persistent Losses And Cash BurnConsistent negative operating cash flow and multi-year negative free cash flow indicate ongoing cash burn that erodes reserves. Over 2–6 months this raises financing risk, could require external capital, and constrains investment in product, sales, or recovery initiatives if cash outflows persist.
Minimal, Volatile Revenue BaseA collapse from modest revenue to zero demonstrates unstable demand or loss of business continuity. Without a reliable revenue stream the firm cannot convert fixed costs into scale, making forecasting and remediating margins difficult and jeopardizing medium-term viability unless sales are rebuilt.
Negative Returns On CapitalSustained negative ROE shows the company is destroying shareholder capital rather than generating returns. This undermines ability to attract new equity, increases dilution risk if financing is needed, and signals poor capital efficiency that hampers long-term recovery and competitiveness.