 Separate concentration ratios must be calculated for each type of concentration.To illustrate, a portfolio with 10 equally sized loans would have a concentration ratio of 0.1 or 10%, whereas a portfolio of 10 loans - 9 equally sized and 1 equal to half the value of the portfolio would have a concentration ratio of 0.27 or 27%.The ratio is useful for bankers or investors at large to identify when a portfolio may be excessively exposed to the risk that a recession or downturn in one sector of the economy or another country may cause a high proportion of the bank's outstanding loans to default.