High LeverageA debt-to-equity ratio above 3x indicates significant financial leverage that raises refinancing, interest, and covenant risks. In a capital‑intensive construction business, high leverage can constrain bidding flexibility, limit investment capacity, and amplify stress during revenue slowdowns.
Negative Free Cash FlowMaterial negative FCF implies the company is not converting earnings into cash, pressuring liquidity and necessitating external funding. Over months this can force higher borrowing, delay capex or dividend policies, and reduce resilience to project delays or adverse contract cycles.
Poor Cash ConversionA very low operating cash flow relative to net income signals weak cash realization from accounting profits, often due to working capital or receivables issues. Structurally poor cash conversion undermines sustainable deleveraging and increases reliance on external financing for operations.