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How to Measure the Robustness Ratio of a Business
The robustness ratio analyzes how much a company saves their customers relative to how much money the company actually makes. Warren Buffett stated in his 2005 annual letter that Geico was saving their customers roughly $1 billion and earning $1 billion in pre-tax profits as well. In Costco's case, you want to offer customers as much value as possible early on in the business cycles so then you can continue to get those early referrals from customers.