DEFINITION of 'Book To Ship Ratio'
The demandsupply ratio of the amount that is recorded in the company's books to the amount of inventory it has shipped out. This ratio can be used to help measure a company's efficiency, and can be used to indentify potential problems in the supply chain.
BREAKING DOWN 'Book To Ship Ratio'
If the ratio is greater than one, it indicates that the company has not sent out all orders. This could indicate a shortage/backorder of needed supplies. If it is one, the company is directly on time, and if below one, the company has excess inventory on hand. For example, if incoming orders for the quarter was $50 million and shipments for the quarter was $100 million, the book to ship ratio is 50%. If this company is making a simple product like widgets, which have quick turnaround times from order to shipment, then this low booktoship ratio could be indicative of problems in either manufacturing or shipping.

Current Ratio
The current ratio is a liquidity ratio measuring a company's ... 
Ratio Analysis
A ratio analysis is a quantitative analysis of information contained ... 
Working Capital Management
A managerial accounting strategy focusing on maintaining efficient ... 
Activity Ratios
Accounting ratios that measure a firm's ability to convert different ... 
Quick Ratio
The quick ratio is an indicator of a company’s shortterm liquidity. ... 
Combined Ratio
A measure of profitability used by an insurance company to indicate ...

Trading
Ratio Analysis
Ratio analysis is the use of quantitative analysis of financial information in a company’s financial statements. The analysis is done by comparing line items in a company’s financial ... 
Markets
Analyze Investments Quickly With Ratios
Make informed decisions about your investments with these easy equations. 
Investing
Efficiency Ratio
There are many types of efficiency ratios, but all measure how well a company utilizes its resources to make a profit. Business managers use these ratios to determine how well they are operating ... 
Markets
Major Companies That Lose Money On Shipping (AMZN)
We look at some of the big companies in the home delivery business that have high shipping costs and how they mitigate this. 
Markets
Do Your Investments Have ShortTerm Health?
If a company is strong enough to survive tough times, it is more likely to provide longterm value. 
Markets
Dynamic Current Ratio: What It Is And How To Use It
Learn why this ratio may be a good alternative to the current, cash and quick ratios. 
Investing
Understanding Activity Ratios
Activity ratios measure how effectively a business uses its assets. 
Trading
6 Basic Financial Ratios And What They Reveal
These formulas can help you pick better stocks for your portfolio once you learn how to use them. 
Investing
Financial Ratios to Spot Companies Headed for Bankruptcy
Obtain information about specific financial ratios investors should monitor to get early warnings about companies potentially headed for bankruptcy. 
Investing
Key Financial Ratios to Analyze Tech Companies
Understand the technology industry and the companies that operate in it. Learn about the key financial ratios used to analyze tech companies.

What do efficiency ratios measure?
Learn about efficiency ratios, what they measure, how to calculate commonly used efficiency ratios and how to interpret these ... Read Answer >> 
Does a high efficiency ratio mean that the company is profitable?
Understand the variety of efficiency ratios and why a high efficiency ratio does not necessarily mean a company is operating ... Read Answer >> 
What is the difference between efficiency ratios and profitability ratios?
Learn about efficiency and profitability ratios, what these ratios measure and the main difference between efficiency and ... Read Answer >> 
How can a company quickly increase its liquidity ratio?
Discover what high and low values in the liquidity ratio mean and what steps companies can take to improve liquidity ratios ... Read Answer >> 
Why do shareholders need financial statements?
Discover the importance of a company's financial statements for stock shareholders in evaluating their equity investment ... Read Answer >> 
How can an investor determine the efficiency of a company's working capital management?
Learn how working capital is vital to a company’s survival. Also learn key metrics investors use to assess how efficiently ... Read Answer >>