Negative Operating And Free Cash FlowSustained negative operating and free cash flow means the business does not generate internal cash to fund operations or investment, forcing reliance on external financing. Over 2–6 months this constrains strategic flexibility, increases financing risk, and can impair the company’s ability to execute growth or product development plans.
Ongoing Losses And Margin DeteriorationPersistent negative EBIT and net margins indicate the company is not converting revenue into profit, reflecting structural cost or pricing issues. Without material margin improvement, losses will erode capital and limit reinvestment capacity, making sustainable profitability unlikely in the medium term.
Declining Equity And Negative ROEA declining equity base combined with negative ROE signals erosion of shareholder capital and value destruction. Over several months this can raise the company’s cost of capital, constrain access to equity funding, and weaken stakeholder confidence, hampering long-term strategic options and partnerships.