Free Cash Flow VolatilityVariable free cash flow undermines predictable funding for investments, dividends, or debt paydown. Even with recent growth, inconsistent FCF complicates planning for plant upgrades or product expansion, and raises reliance on external financing during weaker quarters, affecting durable financial stability.
Moderate Reliance On LiabilitiesA measurable reliance on liabilities means balance sheet flexibility is constrained versus fully equity-funded peers. In a prolonged raw material or demand downturn, this could force higher borrowing costs or curtailed capex, limiting the company's ability to sustain growth initiatives and maintain margins.
Modest Net Profit MarginsRelatively modest net margins limit the buffer against commodity price inflation and the capacity to finance strategic investments internally. Over several months this can compress retained earnings and slow deleveraging or product development, making long-term competitiveness more sensitive to cost swings.