Revenue DeclineSustained revenue decline materially reduces operating leverage and market positioning. Over multiple quarters this erodes scale benefits, makes fixed-cost absorption harder, and raises the bar for returning to profitable growth absent clear demand or market-share recovery.
Negative Cash GenerationPersistent negative free cash flow and weak operating cash conversion show core operations fail to fund themselves. This structural cash shortfall constrains reinvestment, heightens reliance on external financing, and limits ability to sustain turnaround investments long term.
High And Rising LeverageA sharp jump in leverage and low equity ratio raise refinancing and interest-service risk. With weak earnings and cash flow, higher debt materially reduces strategic flexibility, increases default vulnerability, and may force deleveraging steps that impair long-term growth prospects.