Business
Customer Concentration Risk Calculator
This calculator measures largest-customer share, top-five revenue and share, revenue outside the top five, a partial top-five HHI, gross profit tied to the largest customer, and revenue remaining after a largest-customer loss scenario.
Largest entered customer revenue-
Largest entered customer revenue share-
Five entered customers revenue-
Five entered customers revenue share-
Revenue outside the five entered customers-
Five-customer partial concentration index-
Gross profit tied to largest entered customer-
Revenue after losing largest entered customer-
Decision view
Customer revenue concentration tower
Customer revenue concentration towerCustomer 1 through Customer 5 each appear once beside all remaining revenue, while a separate loss result removes whichever entered customer is actually largest.
Exact scenario comparisonCustomer 1 revenue changes while all other entered assumptions remain constant.
| Customer 1 revenue | Largest entered customer revenue | Largest entered customer revenue share | Five entered customers revenue | Five entered customers revenue share | Revenue outside the five entered customers | Five-customer partial concentration index | Gross profit tied to largest entered customer | Revenue after losing largest entered customer |
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Period-by-period detail
Five-customer concentration ledger
How to use Customer Concentration Risk Calculator
- Use revenue from one consistent accounting period and reconcile the top five with total revenue.
- Group related entities when contracts, ownership, or purchasing decisions are economically linked.
- Review gross-profit exposure, replacement time, receivables, contract renewal dates, and operational dependencies.
Calculator guide
Understanding Customer Concentration Risk Calculator
Customer concentration is exposure to revenue loss, gross-profit loss, negotiation pressure, and correlated demand when a small number of accounts dominate the business.
Calculation method
How the calculation works
Identify the largest of five entered customer values before measuring its share, the five-customer share, partial HHI, gross-profit exposure, and the largest-customer loss scenario. Divide each entered customer revenue by total revenue, sum the top five, square and add their percentage shares for a partial HHI, and apply gross margin to the largest account's revenue exposure.
Portfolio risk
See the revenue tower and largest-account shock
The customer stack separates each top-five account, other revenue, and the revenue remaining when the largest account is removed.
Worked situations
Practical examples
- A 20% customer can expose more than 20% of profit when its service costs are unusually low.
- Five customers in one end market may be correlated even when each individual share appears moderate.
- A signed long-term contract reduces some timing risk but does not remove credit or renewal risk.
Better inputs
Useful tips
- Track concentration by revenue, gross profit, receivables, backlog, and end market.
- Build a replacement pipeline before renewal concentration becomes urgent.
- Document switching costs, key-person relationships, and single-customer equipment or staffing.
Before relying on the result
Limitations and common mistakes
- The displayed HHI is partial because individual customers outside the top five are not entered.
- Contracts, credit quality, receivable collectability, switching cost, correlation, and replacement timing are excluded.
- Revenue share does not equal profit share when customer-specific margins differ.
Reference
Key terms
- Largest-customer share
- Largest entered customer revenue divided by total period revenue.
- Top-five share
- Combined revenue from the five entered customers divided by total revenue.
- Partial HHI
- Sum of squared percentage shares for the entered top five only.
- Gross profit at risk
- Largest customer revenue multiplied by average entered gross margin.
Important note
Calculated from the entered values using the displayed accounting method. Reconcile material decisions with source records and applicable accounting policy.
Frequently asked questions
Is the partial HHI comparable with a full market HHI?
No; customers outside the top five are not represented individually.
Should affiliated customers be combined?
Combine them when purchasing or credit decisions are economically linked.
Why use gross profit at risk?
Revenue loss affects business value through the contribution lost, not revenue alone.
What concentration level is safe?
There is no universal threshold; contract quality, margins, replacement time, and risk tolerance matter.