Negative Free Cash FlowPersistent negative free cash flow undermines the firm's ability to internally fund capex, working capital and growth initiatives. Over months, this increases reliance on external financing, raises refinancing risk, and can constrain strategic investments or timely responses to customer contract needs.
Declining Operating MarginsFalling EBIT/EBITDA margins point to structural margin pressure from higher operating costs or inefficiencies. If persistent, margin erosion can weaken return on invested capital, reduce reinvestment capacity, and force pricing or cost-cutting measures that could impair service quality or long-term competitiveness.
Weak Cash ConversionLow conversion of earnings into cash increases working capital strain and diminishes the practical value of reported profits. Over a multi-month horizon this can limit liquidity for operations, delay supplier payments or capex, and raise the likelihood of needing external financing on adverse terms.