Coverage gate
Every Moat Score is computed from specific line items in a company’s SEC filings — gross margins over up to ten years, invested capital, debt and interest, owner earnings, share counts. The coverage gate is the rule for what happens when some of those inputs simply aren’t there. Exactly one component may abstain: the record names the gap and renormalizes the other four initial 20% weights. Two or more abstentions produce insufficient data, not a number.
The temptation every scoring system faces is to fill gaps — interpolate, assume an industry average, quietly drop the missing filter. We think a wrong number dressed as a real one is worse than an honest blank, because you can’t tell it apart from the trustworthy numbers around it. The one-component allowance is explicit rather than quiet; beyond it, the model withholds the composite.
How the Moat Index applies this
On a company page, a sole abstention appears in the composite’s coverage note. A gated company shows “insufficient data” along with which two or more components were missing. The analyzer gives the same disclosure or refusal rather than a guess. The same honesty runs through the fundamentals charts, where a year a company didn’t report renders as a gap, never an interpolated line. The methodology lists the honest limits this rule protects.