Sustained UnprofitabilityPersistent negative net profit and EBIT margins mean the company is not yet converting growth into earnings. Over months, continued unprofitability can erode equity, necessitate external financing, and limit the company’s ability to reinvest in product development or expand sales capacity.
High LeverageElevated debt‑to‑equity increases interest burden and reduces financial flexibility. In a medium‑term window, high leverage raises refinancing and liquidity risk, can constrain strategic investments, and amplifies downside if operating improvements lag expectations.
Negative Free Cash FlowRecurring negative free cash flow indicates capex and other outflows exceed operating cash generation. This structural deficit forces reliance on external funding, heightens liquidity risk, and limits ability to self‑fund growth or absorb shocks without raising debt or equity.