Negative Free Cash FlowPersistent negative free cash flow constrains the firm's ability to self-fund capex, acquisitions or working capital needs. Unless converted to positive cash flow, the company may need external financing, increasing long-term funding costs and strategic limitations.
Weak Cash ConversionOnly 80% conversion of net income into operating cash suggests earnings quality and working capital pressure. Over months, this reduces available liquidity for investment or debt service, heightening reliance on financing and limiting durable operational flexibility.
Elevated LeverageModerate-to-high leverage and a large absolute debt load increase interest and refinancing risk, especially if cash conversion remains weak. This structural burden can constrain strategic options and amplify downside in adverse demand or margin pressures.