Persistent Negative Operating/free Cash FlowChronic negative operating and free cash flow despite reported profits signals weak cash conversion and reliance on non-cash gains or financing. Over months this impairs the firm's ability to fund operations, invest, pay creditors or return capital without external financing or asset disposals.
Severe Revenue ContractionA more than 100% reported revenue decline reflects material shrinkage of fee-bearing activity or one-off reversals, eroding the durable fee base. Structural revenue loss undermines scale economics, pressures margins, and limits the firm's capacity to rebuild earnings without clear, sustained revenue recovery.
Historic Earnings VolatilityWide swings between losses and profits reduce predictability of cash flows and complicate long-term planning. For an asset manager, inconsistent earnings hinder client confidence, make strategic investments and hiring riskier, and raise the probability that current profitability may not persist absent structural fixes.