Large Operating Losses / Widening Net LossPersistent, large operating losses and a widening net loss are structural threats to equity value and reinvestment capacity. Over months this erodes retained capital, pressures management to cut investment or raise dilutive capital, and delays sustainable profitability.
Consistently Negative Operating Cash FlowOngoing negative operating cash flow and worsening cash burn force reliance on external financing or balance-sheet draws. This raises medium-term liquidity and refinancing risk, constrains strategic flexibility, and can increase financing costs or dilution until operations generate positive cash.
Declining Equity And Negative ROEFalling equity and assets alongside sharply negative ROE signal value erosion from losses. Over a 2–6 month horizon this undermines capital resilience, limits borrowing capacity despite low nominal debt, and indicates the firm must restore profitability to halt balance-sheet deterioration.