Net Profit Margin CompressionA falling net margin suggests increasing SG&A, promotional intensity, or rising costs that erode bottom-line returns. If structural, sustained margin pressure could limit retained earnings and reduce the firm's ability to reinvest or expand, weighing on medium-term profitability.
Modest Return On EquityROE near 5% indicates the company generates limited returns on shareholders' capital despite a strong equity base. Over months, this suggests capital may be underutilized or invested in low-return activities, constraining long-term shareholder value unless operational efficiency improves.
Wide Gross-to-net Margin GapA large spread between gross and net margins points to a substantial operating or non-operating cost burden (rent, SG&A, after-sales). Structurally high cost base can limit scalability and make profits sensitive to sales volatility, posing a medium-term profitability risk.