High Financial LeverageElevated leverage materially increases interest and refinancing risk, constraining flexibility to invest or weather downturns. Over several months this heightens vulnerability to cash flow variability and limits capital allocation choices, pressuring long-term stability.
Negative Operating And Free Cash FlowPersistent negative operating and free cash flows undermine the firm's ability to internally fund growth, service debt, or build liquidity. Reliance on external financing or asset sales increases over the medium term and raises execution risk for strategic initiatives.
Declining Profitability And MarginsMaterial margin compression indicates rising costs or pricing pressure, eroding earnings quality. Lower margins reduce cash generation and return on equity, weakening the company's ability to self-fund growth and increasing sensitivity to revenue shocks over the coming months.