Economic Moat
A durable competitive advantage that lets a company protect profits and high returns on capital for years.
What it is
An economic moat is a structural feature that makes it hard for competitors to erode a company's profits. Common sources are intangible assets (brands, patents), switching costs, network effects, cost advantages, and efficient scale. The term was popularized by Warren Buffett and is used to judge whether high returns can last.
Why it matters
Returns on capital tend to fade toward the cost of capital over time as competition arrives. A wide moat slows that fade, so a moaty business can compound value far longer than its rivals. Paying up for a low-moat business is risky because its high margins may not survive.
How it's calculated
There is no single formula; a moat is assessed qualitatively from the source of advantage, then cross-checked quantitatively with persistently high return on invested capital (ROIC) above the cost of capital, stable or rising margins, and durable market share. The key test is durability, not just current profitability.
How Quintarthai uses it
Quinn's bull/bear case and the key-metrics grid on a company deep-analysis page highlight moat signals such as multi-year ROIC, margin stability, and market position.