Negative Equity / Insolvency RiskNegative equity is a durable red flag: it impairs borrowing capacity, may trigger covenant breaches, and limits strategic options. Over months this elevates the likelihood of restructuring, recapitalization, or asset disposals, constraining management's ability to execute long-term recovery plans.
Weak Cash Flow GenerationZero operating cash flow and erratic free cash flow undermine the firm's ability to service debt, fund capex, or invest in growth without external financing. Persistently weak cash generation forces reliance on asset sales or dilution, limiting durable financial flexibility and operational resilience.
Revenue Decline And Persistent LossesSustained revenue decline coupled with negative net margins and falling EBITDA indicates structural or executional issues reducing scale and profitability. Over months this erodes retained capital, pressures working capital, and may necessitate strategic shifts or cost restructuring to restore viability.