Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Capital Southwest's Sloan Ratio for the quarter that ended in Mar. 2026 was 14.09%.
As of Mar. 2026, Capital Southwest has a Sloan Ratio of 14.09%, indicating there is a warning stage of accrual build up.
Capital Southwest (NAS:CSWC) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Mar. 2026, Capital Southwest has a Sloan Ratio of 14.09%, indicating there is a warning stage of accrual build up.
Capital Southwest Sloan Ratio % Related Terms
Capital Southwest Sloan Ratio % Historical Data
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The historical data trend for Capital Southwest's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Asset Management subindustry, Capital Southwest's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Capital Southwest Sloan Ratio % vs Asset Management Industry
For the Asset Management industry and Financial Services sector, Capital Southwest's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Capital Southwest's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Capital Southwest's Sloan Ratio for the fiscal year that ended in Mar. 2026 is calculated as
Capital Southwest's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was 27.001 (Jun. 2025 ) + 25.619 (Sep. 2025 ) + 32.896 (Dec. 2025 ) + 27.479 (Mar. 2026 ) = $113.0 Mil.
Capital Southwest's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 30.493 (Jun. 2025 ) + -71.224 (Sep. 2025 ) + -93.634 (Dec. 2025 ) + -59.139 (Mar. 2026 ) = $-193.5 Mil.
Capital Southwest's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -0.141 (Jun. 2025 ) + -0.081 (Sep. 2025 ) + -0.015 (Dec. 2025 ) + -0.049 (Mar. 2026 ) = $-0.3 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Capital Southwest (CSWC) has a Sloan Ratio % of 14.09% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Capital Southwest and its competitors.
Is Capital Southwest's Sloan Ratio % too high?
Capital Southwest's current Sloan Ratio % is 14.09%. Overall, Capital Southwest has a GF Score™ of 57/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Capital Southwest's Sloan Ratio % compare to BTT and QQQX?
Capital Southwest's Sloan Ratio % of 14.09% can be compared against companies in the Asset Management industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for an Asset Management company?
A good Sloan Ratio % depends on the Asset Management industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Capital Southwest and its competitors. Capital Southwest's current Sloan Ratio % is 14.09%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Capital Southwest stock overvalued right now?
Based on GuruFocus' analysis, Capital Southwest (CSWC) is currently considered Fairly Valued. The stock's GF Value™ is $25.95, compared to a current price of $23.79 — trading 8.3% below its estimated fair value. The current Sloan Ratio % is 14.09%. Capital Southwest's overall GF Score™ is 57/100 with 8 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Capital Southwest (CSWC), the current Sloan Ratio % is 14.09% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Capital Southwest (CSWC) Overvalued in 2026?
Based on GuruFocus' analysis, Capital Southwest stock appears to be undervalued.
The current stock price of $23.79 is trading 8.3% below its estimated GF Value™ of $25.95.
GuruFocus considers Capital Southwest to be Fairly Valued.
Key valuation signals for CSWC:
Sloan Ratio %: 14.09%
GF Value™: $25.95 vs. price of $23.79 (8.3% below fair value)
No single metric tells the full story. See the CSWC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Capital Southwest Corp is a U.S.-based investment company that specializes in providing customized financing to middle market companies across various industries. The company's investment objective is to produce attractive risk-adjusted returns by generating current income from debt investments and capital appreciation from equity and equity related investments. It focuses on providing flexible financing solutions through partnerships with business owners, management teams, and financial sponsors. The company's portfolio may include senior debt, second lien, and subordinated debt, preferred stocks, common stocks, and warrants. The primary source of revenue comprises interest income and dividend income from investments made as well as management fees.
57GF Score
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