Declining Revenue TrendSustained revenue decline erodes scale and makes it harder to cover fixed costs and regain profitability. Over months this structural headwind can force deeper cost cuts, constrain investment in growth initiatives, and increase reliance on non-operating income or asset sales to meet obligations.
Persistent Negative ProfitabilityOngoing negative EBIT and net margins indicate core operations are not yet self-sustaining. This limits retained earnings, increases dependence on external financing or investment returns, and raises execution risk for any turnaround, making durable margin recovery a critical structural challenge.
Falling Gross Profit MarginA sharp drop in gross margin signals pressure on pricing, cost of goods sold, or product mix. Structurally lower gross margins reduce room to cover SG&A and invest in growth, increasing the difficulty of returning to profitability without material improvements in pricing power or cost control.