Negative Operating And Free Cash FlowPersistent negative operating and free cash flows erode liquidity and limit the firm's ability to fund capex, service debt, or invest for growth without external financing. Over months, this raises refinancing, covenant, and solvency risks if cash conversion doesn't improve.
Declining Revenue TrendA multi-year revenue decline undermines scale economics and pressures margins and fixed-cost absorption. If top-line contraction persists, it can weaken competitive position, reduce pricing power, and make it harder to reverse negative cash flow dynamics without strategic change.
High LeverageSignificant leverage raises long-term financial risk by increasing interest and refinancing burdens, especially alongside weak cash generation. High debt limits strategic flexibility, raises refinancing vulnerability, and can amplify downturn impacts on credit and operations.