Declining RevenuePersistent revenue decline reduces operating scale and limits fixed-cost absorption, worsening margin recovery and extending the timeline to profitability. Over months this can erode competitive positioning, reduce bargaining power with suppliers, and constrain reinvestment in backlog or bidding capabilities.
High LeverageSignificant debt levels increase interest and refinancing risk, reducing financial flexibility. In a 2-6 month horizon, leverage can force prioritization of creditors over growth, limit ability to invest in projects, and amplify liquidity stress if earnings remain weak or access to capital tightens.
Negative Operating Cash FlowOngoing negative operating cash flow implies core operations are not self-sustaining and require external funding or asset sales. This persistent cash burn heightens short-term liquidity pressure, increases dependency on financing, and raises risk of covenant breaches or constrained working capital over the coming months.