Free cash flow remains highly erratic, evidenced by a swing from a negative $166.6 million in 2025Q3 to a positive $33.9 million in 2026Q3, which complicates the assessment of recurring liquidity.
| Metric | Mar'26 | Mar'25 | Mar'24 | Mar'23 | Mar'22 | Mar'21 | Mar'20 | Mar'19 | Mar'18 | Mar'17 | Mar'16 | Mar'15 | Mar'14 | Mar'13 | Mar'12 | Mar'11 | Mar'10 | Mar'09 | Mar'08 | Mar'07 | Mar'06 | Mar'05 | Mar'04 | Mar'03 | Mar'02 | Mar'01 | Mar'00 | Mar'99 | Mar'98 | Mar'97 |
|---|
| Cash from Operations | -193.5M | -217.26M | -188.5M | -227.1M | -182.68M | -182.68M | 24.91M | -94.71M | -63.86M | -89.56M | -111.51M | 194.28M | 8.41M | 93.22M | 23.55M | 68.23M | -6.82M | 17.78M | -5.41M | 46.95M | 13.51M | 4.77M | 9.31M | -4.03M | -10.38K | 1.16M | 1.49M | 1.48M | 2.53M | 2.3M |
| Operating CF Margin % | -78.68% | -132.63% | -123.89% | -251.42% | -177.48% | -251.7% | 159.65% | -155.13% | -109.98% | -227.41% | -766.58% | 293.86% | 6.99% | 79.81% | 23.6% | 114.77% | -8.7% | 127.11% | -79.69% | 673.36% | 279.09% | 28.6% | 10.63% | 10.08% | -0.25% | 28.91% | 168% | 113.11% | 125.07% | 167.58% |
| Operating CF Growth % | 10.93% | -15.26% | 17% | -24.32% | 0% | -833.49% | 126.3% | -48.3% | 28.69% | 19.68% | -157.39% | 2209.33% | -90.97% | 295.84% | -65.49% | 1100.39% | -138.37% | 428.32% | -111.53% | 247.64% | 183.22% | -48.79% | 331.09% | -38707.29% | -100.89% | -21.58% | 0.43% | -41.6% | 10.17% | -17.54% |
| Net Income | 113M | 70.55M | 83.39M | 33.09M | 42.81M | 42.81M | -22.35M | 33.06M | 39.31M | 23.47M | -5.4M | 53.44M | 112.01M | 107.83M | 91.76M | 53.69M | 73.54M | -138.31M | -139.01M | 166.88M | 96.19M | 14.22M | 85.47M | -41.73M | 25.68M | -7.98M | -17.07M | -38.48M | 78.6M | 32.18M |
| Depreciation & Amortization | 0 | 5.87M | 4.3M | 4.32M | 5.92M | 2.23M | 2.4M | 1.39M | 927K | 459K | 86K | 55K | 23K | 30K | 25K | 27K | 33.13K | 40.48K | 32.76K | 16.81K | 16.14K | 17.6K | 19.09K | 21.67K | 26.26K | 29.89K | 31.98K | 24.67K | 23.77K | 31.24K |
| Stock-Based Compensation | 0 | 0 | 0 | 3.71M | 3.58M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1.05M | 957K | 675.21K | 503.64K | 263.66K | 169K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | -119K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -123K | 0 | 0 | 0 | 0 | -1.37M | 2.34M | 0 | 0 | 135.8K | 176.6K | 170.4K | 152.6K | 109.1K | 109.73K | 122.5K |
| Other Non-Cash Items | -301.38M | -288.94M | -272.33M | -265.63M | -231.29M | -225.21M | 50.42M | -129.44M | -105.09M | -105.74M | -107.71M | 142.35M | -104.19M | -16.29M | -68.2M | 12.96M | -80.86M | 155.91M | 133.26M | -118.42M | -84.85M | -9.45M | -76.37M | 36.24M | -24.14M | 9.21M | 18.29M | 39.8M | -76.15M | -30.04M |
| Working Capital Changes | -5.12M | -4.73M | -3.86M | -2.59M | -3.7M | -2.52M | -5.57M | 288K | 993K | -7.75M | 1.52M | -1.57M | 569K | 1.64M | -958K | 603K | -206.61K | -364.86K | 46.33K | -326.52K | -183.83K | -24.53K | 196.23K | 1.3M | -1.75M | -271.83K | 77.11K | 17.17K | -53.06K | 5.19K |
| Change in Receivables | -1.86M | -11.49M | 0 | -6.8M | -1.54M | -3.77M | -80K | -4.41M | -1.58M | 2.36M | -1.99M | -3.05M | 1.39M | -794K | 0 | 1.01M | 0 | 0 | 0 | -202K | 514 | 0 | 0 | 1.46M | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -67.25K | 121.2K | 41.7K | -96.19K | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -286K | -1.67M | -13K | -281K | -2M | -2M | -72.85M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 19.08M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 4.65M | -7.72M | -6.26M | -11.16M | 2.05M | 2.93M |
| Capital Expenditures | -286K | 0 | -13K | -281K | -2M | -2M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| CapEx % of Revenue | 0.12% | 1.02% | 0.01% | 0.31% | 1.94% | 2.75% | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Acquisitions | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Investments | 2.1B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 574.48M | 558.55M | 489.27M | 477.94M | 396.64M | 547.57M | 681.16M | 550.43M | 422.02M | 406.95M | 574.12M | 347.48M | 315.92M | 0 | 0 | 0 | 0 |
| Other Investing | 303.88M | 323.89M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 7.26M | 0 | 0 | -4.07M | -266.64K | -6.6M | -6.27M |
| Cash from Financing | 178.36M | 231.52M | 199.2M | 237.53M | 164.49M | 164.49M | 51.77M | 96.72M | 49.38M | 15.98M | -18.32M | -56.65M | -2.02M | -76.34M | -4.15M | -26.83M | -3.81M | -34.38M | -2.1M | -19.61M | -7.11M | -9.81M | -3.81M | 6.7M | -3.8M | -56.29M | 62.71M | -101.31M | 98.45M | -58.26M |
| Debt Issued (Net) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Equity Issued (Net) | 157.82M | 178.49M | 181.45M | -1.02M | -1.41M | 98.14M | 16.77M | 18.71M | -588K | 0 | 0 | 0 | 0 | 0 | 99K | 745K | 0 | -16.9M | 231.39K | 0 | 0 | 0 | 0 | 0 | 498.75K | 0 | 0 | 965.44K | 720.19K | 0 |
| Dividends Paid | -147.23M | -125.27M | -102.92M | -71.1M | -58.62M | -58.62M | -50.34M | -42.53M | -18.59M | -5.99M | -14.54M | -3.08M | -3.05M | -80.33M | -1.22M | -2.99M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -2.3M | -2.29M | -2.29M | -2.29M | -2.28M | -2.27M | -2.26M |
| Share Repurchases | 0 | 0 | 0 | -1.02M | -1.41M | 0 | -9.21M | -185K | -588K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -16.9M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -1.12M | -4.27M | -11.25M | 201.61M | 79.08M | -20.47M | -418K | 28K | -2.22M | -3.03M | -3.78M | -53.57M | 1.03M | 3.98M | -3.03M | -24.58M | -3.81M | -17.48M | -2.33M | -11.61M | -2.11M | -2.31M | -3.81M | 0 | 0 | 0 | 5M | 0 | 0 | 0 |
| Net Change in Cash | -15.43M | 12.6M | 10.69M | 10.15M | -20.18M | -20.18M | 3.82M | 2.02M | -14.48M | -73.58M | -129.83M | 137.63M | 6.4M | 16.87M | 19.4M | 41.41M | -10.63M | -16.61M | -7.52M | 27.34M | 6.4M | -5.05M | 5.5M | 2.67M | 839.41K | -62.85M | 57.94M | -111M | 103.04M | -53.04M |
| Free Cash Flow | -193.5M | -218.92M | -188.51M | -227.38M | -184.67M | -184.67M | 24.91M | -94.71M | -63.86M | -89.56M | -111.51M | 194.28M | 8.41M | 93.22M | 23.55M | 68.23M | -6.82M | 17.78M | -5.41M | 46.95M | 13.51M | 4.77M | 9.31M | -4.03M | -10.38K | 1.16M | 1.49M | 1.48M | 2.53M | 2.3M |
| FCF Margin % | -78.68% | -133.64% | -123.9% | -251.73% | -179.42% | -254.45% | 159.65% | -155.13% | -109.98% | -227.41% | -766.58% | 293.86% | 6.99% | 79.81% | 23.6% | 114.77% | -8.7% | 127.11% | -79.69% | 673.36% | 279.09% | 28.6% | 10.63% | 10.08% | -0.25% | 28.91% | 168% | 113.11% | 125.07% | 167.58% |
| FCF Growth % | 11.61% | -16.13% | 17.1% | -23.13% | 0% | -841.5% | 126.3% | -48.3% | 28.69% | 19.68% | -157.39% | 2209.33% | -90.97% | 295.84% | -65.49% | 1100.39% | -138.37% | 428.32% | -111.53% | 247.64% | 183.22% | -48.79% | 331.09% | -38707.29% | -100.89% | -21.58% | 0.43% | -41.6% | 10.17% | -17.54% |
| FCF per Share | -2.94 | -4.28 | -4.63 | -7.58 | -8.09 | -9.69 | 1.38 | -5.66 | -3.96 | -5.64 | -7.09 | 12.51 | 0.55 | 6.06 | 1.54 | 4.54 | -0.46 | 1.19 | -0.35 | 3.02 | 0.87 | 0.31 | 0.60 | -0.26 | -0.00 | 0.08 | 0.10 | 0.10 | 0.17 | 0.15 |
| FCF Conversion (FCF/Net Income) | -1.71x | -3.08x | -2.26x | -6.86x | -4.27x | -3.59x | -1.11x | -2.86x | -1.62x | -3.82x | 20.65x | 3.64x | 0.08x | 0.86x | 0.25x | 1.27x | -0.09x | -0.13x | 0.04x | 0.28x | 0.14x | 0.34x | 0.11x | 0.10x | -0.00x | -0.15x | -0.09x | -0.04x | 0.03x | 0.07x |
| Interest Paid | 0 | 0 | 0 | 25.47M | 18.4M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Portfolio liquidity and valuation
As reported in recent financial statements, CSWC exhibits a significant divergence between net income and operating cash flow, with the OCF/NI ratio fluctuating wildly from -10.19 in 2025Q3 to 1.13 in 2026Q1, suggesting that reported earnings are frequently decoupled from immediate cash generation capabilities.
The extreme variance in the OCF/NI ratio indicates that net income is heavily influenced by non-cash accruals and unrealized valuation adjustments inherent in the BDC model. Investors should monitor whether these cash flow swings represent temporary timing differences in portfolio interest collections or more structural issues regarding the liquidity of underlying assets.
According to quarterly SEC filings, CSWC's free cash flow trajectory remains highly erratic, swinging from a negative $166.6 million in 2025Q3 to a positive $33.9 million in 2026Q3, which underscores the impact of lumpy capital deployment and portfolio-related cash movements on the firm's overall liquidity profile.
The persistent negative FCF in several periods suggests that the firm is aggressively reinvesting cash into the portfolio rather than generating surplus liquidity for shareholders. This pattern warrants further investigation into whether the dividend payout is being sustained by recurring interest income or if it relies on periodic capital recycling.
Based on reported figures, CSWC's working capital changes have been inconsistent, ranging from a $8.1 million outflow in 2025Q2 to a $2.8 million inflow in 2024Q3, indicating that the timing of interest receipts and portfolio-related settlements creates meaningful noise in the firm's quarterly cash flow statements.
These fluctuations suggest that the firm's cash position is sensitive to the payment cycles of its lower middle market borrowers. Analysts should interpret these shifts as a reflection of the inherent credit risk and payment variability within the portfolio rather than operational inefficiency.
As detailed in recent regulatory filings, CSWC has maintained a consistent dividend payout trend, with quarterly distributions reaching $38.5 million in 2026Q4, even as operating cash flows have shown significant volatility, suggesting a reliance on balance sheet liquidity to support shareholder returns during periods of negative cash generation.
The firm's ability to fund dividends while experiencing negative operating cash flow suggests that management is prioritizing shareholder distributions over immediate cash preservation. Investors should monitor the sustainability of this approach if the gap between net income and cash flow persists over the coming fiscal years.
Quick answers to the most common questions about buying CSWC stock.
Capital Southwest Corporation (CSWC) generated $-193.5M in net cash from operating activities in 2026. This reflects the cash generated directly from core business operations.
Capital Southwest Corporation (CSWC) reported negative free cash flow of $193.5M in 2026, indicating capital requirements exceeded cash from operations.
Capital Southwest Corporation (CSWC) spent $0.3M on capital expenditures in 2026. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2026, Capital Southwest Corporation (CSWC) returned $147.2M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.