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Capital Southwest Corporation (NAS:CSWC)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Capital Southwest Corporation has an F-score of 3 indicating the company's financial situation is typical for a stable company.

CSWC' s 10-Year Piotroski F-Score Range
Min: 2   Max: 5
Current: 3

2
5

During the past 13 years, the highest Piotroski F-Score of Capital Southwest Corporation was 5. The lowest was 2. And the median was 3.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was -1.227 + 59.568 + 44.424 + 9.245 = $112.01 Mil.
Cash Flow from Operations was 18.953 + -1.808 + -1.981 + -10.539 = $4.63 Mil.
Revenue was 2.212 + 8.363 + 0.977 + 1.055 = $12.61 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0.00 Mil.
Total Assets at the begining of this year (Mar13) was $667.67 Mil.
Total Assets was $778.69 Mil.
Long-Term Debt was $0.00 Mil.
Total Current Assets was $0.00 Mil.
Total Current Liabilities was $0.00 Mil.
Net Income was 41.05 + 28.203 + 50.193 + -11.615 = $107.83 Mil.

Revenue was 1.068 + 6.972 + 1.344 + 1.451 = $10.84 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0.00 Mil.
Total Assets at the begining of last year (Mar12) was $632.99 Mil.
Total Assets was $667.67 Mil.
Long-Term Debt was $0.00 Mil.
Total Current Assets was $0.00 Mil.
Total Current Liabilities was $0.00 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Capital Southwest Corporation's current net income was 112.01. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Capital Southwest Corporation's current cash flow from operations was 4.63. ==> Positive ==> Score 1.

Q3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income/Total Assets at the beginning of this year (Mar13)
=112.01/667.672
=0.16776201

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=107.831/632.989
=0.17035209

Capital Southwest Corporation's return on assets of this year was 0.16776201. Capital Southwest Corporation's return on assets of last year was 0.17035209. ==> Last year is higher ==> Score 0.

Q4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA =< ROA.

Capital Southwest Corporation's current net income was 112.01. Capital Southwest Corporation's current cash flow from operations was 4.63. ==> 4.63 =< 112.01 ==> CFROA =< ROA ==> Score 0.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=0/778.694
=0

Gearing (Last Year)=Long-Term Debt/Total Assets
=0/667.672
=0

Capital Southwest Corporation's gearing of this year was 0. Capital Southwest Corporation's gearing of last year was 0. ==> Last year is lower ==> Score 0.

Q6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year)=Total Current Assets/Total Current Liabilities
=0/0
=

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=0/0
=

Capital Southwest Corporation's current ratio of this year was . Capital Southwest Corporation's current ratio of last year was . ==> Last year's current ratio is higher ==> Score 0.

Q7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Capital Southwest Corporation's number of shares in issue this year was 0. Capital Southwest Corporation's number of shares in issue last year was 0. ==> There is more number of shares in issue this year. ==> Score 0.

Efficiency

Q8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year)=Gross Profit/Revenue
=0/12.607
=0

Gross Margin (Last Year)=Gross Profit/Revenue
=0/10.835
=0

Capital Southwest Corporation's gross margin of this year was 0. Capital Southwest Corporation's gross margin of last year was 0. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue/Total Assets at the beginning of this year (Mar13)
=12.607/667.672
=0.01888203

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=10.835/632.989
=0.0171172

Capital Southwest Corporation's asset turnover of this year was 0.01888203. Capital Southwest Corporation's asset turnover of last year was 0.0171172. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+0+0+0+0+0+1
=3

Good or high score = 8 or 9

Bad or low score = 0 or 1

Capital Southwest Corporation has an F-score of 3 indicating the company's financial situation is typical for a stable company.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Capital Southwest Corporation Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
Q1 1110011111
Q2 1110101111
Q3 0110010110
Q4 0001101000
Q5 0000000000
Q6 0000000000
Q7 0001000000
Q8 0000000000
Q9 0010101101
F-score 2342324433

Capital Southwest Corporation Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111111111
Q3 0111111000
Q4 0010000000
Q5 0000000000
Q6 0000000000
Q7 0000000000
Q8 0000000000
Q9 1111101001
F-score 3454434223
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