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Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. As with many other companies Marvell Technology, Inc. (NASDAQ:MRVL) makes use of debt. But should shareholders be worried about its use of debt?

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When Is Debt A Problem?

Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, plenty of companies use debt to fund growth, without any negative consequences. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is Marvell Technology's Net Debt?

As you can see below, Marvell Technology had US$4.06b of debt, at February 2025, which is about the same as the year before. You can click the chart for greater detail. However, it does have US$948.3m in cash offsetting this, leading to net debt of about US$3.12b.

How Healthy Is Marvell Technology's Balance Sheet?

We can see from the most recent balance sheet that Marvell Technology had liabilities of US$2.03b falling due within a year, and liabilities of US$4.75b due beyond that. Offsetting these obligations, it had cash of US$948.3m as well as receivables valued at US$1.03b due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$4.80b.

Given Marvell Technology has a humongous market capitalization of US$45.8b, it's hard to believe these liabilities pose much threat. But there are sufficient liabilities that we would certainly recommend shareholders continue to monitor the balance sheet, going forward. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately the future profitability of the business will decide if Marvell Technology can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts .