MeritValue

CAPITAL SOUTHWEST CORP

CSWCdata completeness 88%10 fiscal years on file

Data notes: no data for concept 'pretaxIncome'

The thesis, from the filings

CAPITAL SOUTHWEST CORP earns about 9% on equity, but has diluted owners by 188% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $11.11 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2023FY 2024FY 2025FY 2026
Revenue—————
Net income$42.8M1$33.1M2$83.4M3$70.5M3$113M3
Operating cash flow−$182.7M4−$227.1M5−$188.5M6−$217.3M6−$193.5M6
Capital expenditure$2M7$281,0008$13,0009$1.67M9$286,0009
Free cash flow (derived)−$184.7M4−$227.4M5−$188.5M6−$218.9M6−$193.8M6
Total debt$528.6M10$637.6M11$770.9M12$956.1M13$1.13B13
Cash & equivalents$11.4M14$21.6M15$32.3M16$43.2M16$29M16
Diluted shares22.8M30.0M40.7M51.2M65.8M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$153.58
your share of equity
Profit it earned you last year
$17.16
Free cash flow it threw off
−$29.44
Debt you’d be carrying
$171.84

10 shares is a claim on $153.58 of net worth that earned you $17.16 and generated −$29.44 of cash last year, against $171.84 of debt.

iii. Is this a good business?
Moat signal · return on equity
9% avg · 5y
FY22 10%FY23 6%FY24 11%FY25 8%FY26 11%

It earned an average 9% on equity over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+188% shares · 5y

Share count is up 188% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 114% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$11.11
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$70.5M
  • growthAssumed0.0%
Graham Number
$25.62
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2022-03-31 · accession 0000017313-24-000022 (NetIncomeLoss)
  2. 10-K · period ending 2023-03-31 · accession 0000017313-25-000042 (NetIncomeLoss)
  3. 10-K · period ending 2024-03-31 · accession 0000017313-26-000035 (NetIncomeLoss)
  4. 10-K · period ending 2022-03-31 · accession 0000017313-24-000022 (NetCashProvidedByUsedInOperatingActivities)
  5. 10-K · period ending 2023-03-31 · accession 0000017313-25-000042 (NetCashProvidedByUsedInOperatingActivities)
  6. 10-K · period ending 2024-03-31 · accession 0000017313-26-000035 (NetCashProvidedByUsedInOperatingActivities)
  7. 10-K · period ending 2022-03-31 · accession 0000017313-24-000022 (PaymentsToAcquirePropertyPlantAndEquipment)
  8. 10-K · period ending 2023-03-31 · accession 0000017313-25-000042 (PaymentsToAcquirePropertyPlantAndEquipment)
  9. 10-K · period ending 2024-03-31 · accession 0000017313-26-000035 (PaymentsToAcquirePropertyPlantAndEquipment)
  10. 10-K · period ending 2022-03-31 · accession 0000017313-23-000025 (LongTermDebt)
  11. 10-K · period ending 2023-03-31 · accession 0000017313-24-000022 (LongTermDebt)
  12. 10-K · period ending 2024-03-31 · accession 0000017313-25-000042 (LongTermDebt)
  13. 10-K · period ending 2025-03-31 · accession 0000017313-26-000035 (LongTermDebt)
  14. 10-K · period ending 2022-03-31 · accession 0000017313-23-000025 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-03-31 · accession 0000017313-25-000042 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-03-31 · accession 0000017313-26-000035 (CashAndCashEquivalentsAtCarryingValue)