High Leverage And Low Equity RatioSignificant leverage and a low equity ratio constrain financial flexibility and increase default risk if demand weakens. Interest and covenant pressures can force defensive decisions, limiting capital allocation to productive investments and raising refinancing risk over the medium term.
Repeated Negative Free Cash FlowPersistent negative free cash flow erodes liquidity and forces reliance on external funding to cover capex and working capital. This undermines the company’s ability to deleverage, invest in efficiency initiatives, or absorb cyclical downturns, increasing structural financial vulnerability.
Negative Profitability And Inconsistent Revenue TrendsOngoing negative operating margins and declining revenues indicate deep operational inefficiencies and weak pricing or mix. Over the medium term this reduces retained earnings, limits reinvestment capacity, and magnifies the impact of leverage, making sustainable margin recovery more challenging.