Declining Revenue TrendA meaningful revenue contraction reduces scale, erodes bargaining power with suppliers and distributors, and limits ability to cover fixed manufacturing costs. If the top-line trend persists beyond a few quarters it can pressure margins, cash flow and long-term growth prospects.
Negative Operating & Free Cash FlowOperating cash flow turning negative signals core operations aren't generating sufficient cash to sustain the business. Even with low leverage, persistent cash deficits can force external financing, curtail reinvestment or dividends, and raise liquidity risk over the medium term.
Earnings DeteriorationSharp EPS decline and weaker net margins show profitability stress beyond gross-margin dynamics, implying higher SG&A, other costs or one-offs. Continued earnings deterioration undermines retained earnings, reduces financial buffer and constrains strategic initiatives over coming quarters.