Cash Flow VolatilityVolatile operating cash flow raises planning risk for capex, working capital and dividends. Irregular cash conversion can force reliance on short-term financing or cash buffers, constraining consistent investment in expansion or margin-improving projects over the medium term.
Low Return On EquityA low ROE implies limited effectiveness in converting equity into profits, signaling modest shareholder returns. Without sustained margin or growth improvement, this can limit the company’s attractiveness for reinvestment and reduce capital allocation flexibility over time.
Declining Gross Margin TrendA downward gross margin trend suggests rising input costs, pricing pressure, or adverse mix shifts. If structural, it erodes operating leverage and long-term profitability, requiring persistent cost-control or price recovery efforts to sustain margins and fund growth.