Persistent Net Losses And Margin DeclinesOngoing net losses and shrinking gross profit margins undermine long-term profitability and shareholder value. Persistent negative margins reduce internal retained earning capacity, limit reinvestment, and make it harder to achieve sustainable operating leverage even if top-line growth resumes.
Negative Operating And Free Cash FlowConsistently negative operating and free cash flows weaken liquidity and constrain the firm's ability to fund operations, capex and service obligations from internal sources. This structural cash generation shortfall increases reliance on external financing and raises execution risk over months.
Rising Leverage And Negative ROEAn increased debt burden alongside negative ROE signals higher financial risk and reduced resilience to shocks. Elevated leverage limits strategic flexibility, raises interest sensitivity, and can amplify downside if profitability does not recover, pressuring solvency over the medium term.