Pricing power
Fundamental analysisThe ability to raise prices without losing enough volume to matter.
In plain terms
About the buyer’s position at the moment of paying, not product quality. Salt has it; a thali does not.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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COGS
AccountingAlso called: Cost of goods sold
Cost of goods sold — the direct cost of producing what was actually sold in the period.
In plain terms
Revenue minus this is gross profit, the purest read on pricing power. Rising faster than revenue means input costs are not being passed on.
Elasticity
Fundamental analysisHow much demand changes when price changes.
In plain terms
Low elasticity means you can raise prices and keep the customer. That is pricing power in one word.
Inflation pass-through
Fundamental analysisThe extent to which a company can pass rising input costs on to customers.
In plain terms
A cost spike is a free experiment. Margins hold if there is pricing power, compress if there is not.