Declining RevenuesSustained revenue decline erodes scale and market position, reducing operating leverage and making fixed costs a heavier burden. Without a clear growth driver or market share recovery, profitability and cash generation remain structurally challenged over the medium term.
Severe Gross Margin CompressionA dramatic fall in gross margins signals loss of pricing power or rising input costs and directly compresses operating profitability. Restoring margins typically requires strategic product, pricing or cost structural changes, making near-term margin recovery uncertain.
Negative Operating Cash Flow And MarginsNegative operating cash flow and persistent negative margins mean the business is consuming cash to run, increasing reliance on reserves or financing. This undermines ability to invest, sustain dividends, or execute strategic initiatives without either improving operations or raising external capital.