Persistent Operating LossesSustained negative operating results mean the business is not earning economic profits despite revenue, limiting internal cash retention and reinvestment. Over a multi-month horizon this undermines durability of operations and raises the likelihood of needed restructuring or external funding to cover deficits.
Negative Return On EquityA negative ROE shows shareholder capital is not generating positive returns, signaling inefficient capital deployment. Persistently negative ROE can constrain management options for growth, reduce ability to attract long-term investors, and necessitate corrective actions that may be disruptive.
Volatile Cash-Flow ProfileSharp swings in free cash flow reduce predictability for capital planning and increase refinancing risk if cash reverses. Volatility makes sustaining investments or meeting liabilities harder without tapping equity or debt, weakening the company's structural resilience over months.