Weak Cash GenerationOperating cash remains low relative to reported earnings and free cash flow is still negative, constraining the company's ability to self-fund inventory, capex or growth. Continued cash conversion issues increase reliance on external financing and limit strategic flexibility.
Margin Pressure / EfficiencyDeclining gross and operating margins point to cost pressure or pricing challenges. Sustained margin erosion reduces retained earnings and capacity to reinvest, requiring operational fixes to restore long-term profitability and protect cash flows against input-cost volatility.
Residual Leverage RiskAlthough leverage metrics improved, high absolute liabilities versus assets leave the company exposed to interest-rate or demand shocks. This residual leverage raises refinancing and liquidity risk, which can constrain strategy and capital allocation over the next several quarters.