Negative ProfitabilityPersistent negative net income and deteriorating gross and net margins indicate structural profitability challenges. Over several months this undermines retained earnings, limits reinvestment capacity, and requires meaningful margin improvements or revenue quality gains to achieve sustainable profitability.
Poor Cash GenerationMaterial negative free cash flow and weak operating cash conversion mean earnings do not translate into liquidity. This structural cash shortfall constrains working capital, capex, and debt servicing, forcing reliance on external financing until operations generate positive free cash flow.
High Leverage And Falling EquityA high debt-to-equity position with declining shareholders' equity elevates solvency and refinancing risk. Over a multi-month horizon, this reduces financial flexibility, increases interest burden, and can limit strategic options unless deleveraging or equity support occurs to restore balance-sheet resilience.