Negative Operating Cash FlowSustained negative operating cash flow erodes liquidity and forces reliance on external financing or asset sales. Over a 2–6 month horizon this undermines the firm's ability to fund working capital, meet obligations, and invest in essential maintenance or turnaround actions.
Loss-making OperationsMaterial net losses and negative EBIT reflect weak margins and structural operating issues. Persistent unprofitability reduces retained earnings, constrains reinvestment, and damages creditworthiness, making sustainable recovery dependent on meaningful margin improvement or strategic restructuring.
Declining Equity And High LiabilitiesA falling equity base combined with elevated total liabilities reduces the balance-sheet buffer and increases refinancing and covenant risk. Over several months this dynamic raises the probability of financing stress or dilutive capital raises if operational cash generation does not improve.