High LeverageA high debt-to-equity ratio increases interest burden and reduces financial flexibility. In a cyclical industry like textiles, leverage amplifies downside from volume or margin shocks, limiting the company's ability to invest, restructure, or absorb prolonged weak demand over the next 2–6 months.
Declining Revenue TrendA meaningful year-over-year revenue decline signals weakening demand or loss of volume and pricing power. Reduced top-line scale pressures margins, operating leverage, and cash generation, making it harder to repair the balance sheet or fund working capital without external support in the medium term.
Negative Free Cash FlowNegative free cash flow forces reliance on debt or equity to fund operations and capex, raising refinancing risk given existing leverage. Persistent negative FCF constrains capacity to pay down debt, invest in efficiency, or withstand demand downturns across the next several months.