Free Cash Flow VolatilityLarge swings in free cash flow undermine the company’s ability to reliably fund capex, service debt, or sustain dividends without external financing. Persistent volatility raises funding risk and limits strategic optionality, especially if growth requires steady internal cash.
Low Net Profit MarginDespite operational gains, a still-low net margin constrains retained earnings and return on capital. This limits the company’s capacity to build equity organically and makes it more exposed to margin compression from cost or pricing shocks over the medium term.
Rising Total DebtA gradual increase in total debt, combined with cash flow variability, elevates leverage and refinancing risk. If cash generation does not stabilize, incremental debt can raise interest burden, restrict capital allocation flexibility, and pressure liquidity during stress periods.