Earnings quality · updated October 21, 2026
What is a company's economic moat
An economic moat, named after the water-filled ditch around a castle, is what lets a company earn more than its competitors for years. It can be a strong brand, lower costs, customers who find it hard to switch, or a network that becomes more valuable with every new user.
How it is calculated
On einvestitii.ro, the moat is our own estimate, calculated from the numbers, not from opinions: how high and steady ROIC has been compared with the cost of capital, how stable the margins are, and whether the direction is up or down. The result is "wide", "narrow" or "no visible moat".
We calculate this one ourselves. Below you can see what goes into it and how to read it; we do not publish the exact weights. The full details are in our Methodology.
See the MethodologyHow to read economic moat
A wide moat does not make a stock cheap. The best companies are usually also the most expensive.
When economic moat can fool you
Technology changes the rules: advantages that looked safe (Nokia, Kodak) disappeared within a few years.
Related terms
Questions about economic moat
What kinds of moat are there?
The best known: brand (Coca-Cola), low costs (Costco), switching costs (Microsoft), network effects (Visa) and licenses or patents.
These explanations are for information only. They are not a recommendation to buy or sell.
Back to the glossary