Does MicroVision (NASDAQ:MVIS) Have A Healthy Balance Sheet?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. We note that MicroVision, Inc. (NASDAQ:MVIS) does have debt on its balance sheet. But the more important question is: how much risk is that debt creating?

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When Is Debt A Problem?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. 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. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. The first step when considering a company's debt levels is to consider its cash and debt together.

What Is MicroVision's Net Debt?

As you can see below, at the end of March 2025, MicroVision had US$30.1m of debt, up from none a year ago. Click the image for more detail. However, its balance sheet shows it holds US$69.0m in cash, so it actually has US$38.9m net cash.

A Look At MicroVision's Liabilities

Zooming in on the latest balance sheet data, we can see that MicroVision had liabilities of US$41.9m due within 12 months and liabilities of US$21.7m due beyond that. On the other hand, it had cash of US$69.0m and US$252.0k worth of receivables due within a year. So it actually has US$5.76m more liquid assets than total liabilities.

This state of affairs indicates that MicroVision's balance sheet looks quite solid, as its total liabilities are just about equal to its liquid assets. So it's very unlikely that the US$296.6m company is short on cash, but still worth keeping an eye on the balance sheet. Simply put, the fact that MicroVision has more cash than debt is arguably a good indication that it can manage its debt safely. The balance sheet is clearly the area to focus on when you are analysing debt. But it is future earnings, more than anything, that will determine MicroVision's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

View our latest analysis for MicroVision

Over 12 months, MicroVision made a loss at the EBIT level, and saw its revenue drop to US$4.3m, which is a fall of 42%. To be frank that doesn't bode well.

So How Risky Is MicroVision?

By their very nature companies that are losing money are more risky than those with a long history of profitability. And in the last year MicroVision had an earnings before interest and tax (EBIT) loss, truth be told. And over the same period it saw negative free cash outflow of US$62m and booked a US$99m accounting loss. But at least it has US$38.9m on the balance sheet to spend on growth, near-term. Overall, its balance sheet doesn't seem overly risky, at the moment, but we're always cautious until we see the positive free cash flow. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. Be aware that MicroVision is showing 4 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.