Rising LeverageAn increasing debt-to-equity ratio reduces financial flexibility and raises interest and refinancing risk. If leverage continues to climb, it could constrain capital allocation, limit strategic investments, and increase vulnerability to economic slowdowns, making funding and growth costlier.
Volatile Cash Flow GenerationWide swings in free cash flow growth and a declining operating-cash-to-net-income ratio complicate planning and undermine predictability for capex, dividends, and debt servicing. Even with decent FCF conversion, volatility raises execution and liquidity risks over the medium term.
Emerging Margin PressureA trend of compressing gross margins, even if modest, signals rising cost pressures or pricing constraints. Paired with higher leverage and cash volatility, continued margin erosion would pressure net profitability and reduce capacity to invest in R&D or absorb demand shocks.