Declining RevenueA marked revenue decline reduces scale and undermines gross margin absorption, pressuring profitability and fixed‑cost coverage. Sustained top‑line weakness can shrink market share, limit bargaining power with suppliers and reduce funds available for marketing and R&D over the medium term.
Recent Net LossesA negative net profit margin means the company is burning earnings and depleting retained equity. Continued losses constrain reinvestment, dividend sustainability and the ability to self‑fund recovery, increasing reliance on external financing or cost restructuring.
Liquidity / Equity ErosionShrinking shareholders' equity and total assets signal balance sheet contraction and potential liquidity strain. Combined with operating losses, this elevates the risk of covenant pressure or the need for external capital, which could dilute shareholders or limit strategic options.