Declining ProfitabilityPersistent negative EBIT and net margins signal structural operating issues: pricing pressure, cost overruns or insufficient scale. Sustained unprofitability undermines retained earnings, constrains reinvestment, and can erode competitive positioning if not reversed within several quarters.
Negative Revenue TrendMaterial year-over-year revenue decline indicates shrinking demand or lost market share in core machine-tool markets. Continued top-line contraction hampers fixed-cost absorption, reduces bargaining power with suppliers, and limits the firm's ability to scale its higher-margin after-sales business.
Negative Return On EquityNegative ROE reflects the company's inability to generate returns on shareholder capital, which can deter investment and pressure strategic initiatives. Over time, persistent negative ROE risks reduced capital access and may force difficult choices on dividends, capex or restructuring.