Revenue Concentration
Definition
Revenue Concentration measures the degree to which a company`s revenue is derived from a limited number of customers or products, indicating potential risk exposure.
Benefits
Revenue concentration highlights potential risk by measuring reliance on a few customers or products.
Frequently Asked Questions
What is a revenue concentration? Revenue concentration shows how much a company relies on a small number of customers or products for its income.
What is the customer concentration measure? Customer concentration evaluates how much of a company`s revenue is dependent on its largest customers, highlighting potential risk.
How to calculate revenue concentration? Revenue concentration is calculated by seeing what percentage of total revenue comes from top customers, products, or markets.
Summary
Revenue concentration measures risk by looking at how much a company relies on a few customers or products.