Declining Revenue TrendA steep revenue decline reduces scale economics and pressures gross margins and fixed-cost absorption. Persistently lower top-line makes it harder to restore profitability, fund growth initiatives, or improve leverage metrics without structural changes to sales or pricing.
High LeverageElevated leverage increases interest obligations and reduces financial flexibility. In a low-profitability environment, high debt amplifies solvency risk, constrains capital allocation, and limits the company's ability to invest or withstand further revenue pressure.
Negative Net And EBIT MarginsNegative EBIT and net margins point to persistent operational inefficiencies or cost structure mismatches. Even with positive EBITDA, losses at EBIT/net levels undermine retained earnings and make sustainable profitability and deleveraging more difficult without structural cost or revenue fixes.