Investopedia

Continue to Site »

Book-To-Bill Ratio

Filed Under » ,
Dictionary Says

Definition of 'Book-To-Bill Ratio'

The ratio of orders received to units shipped and billed for a specified period, generally a month or quarter. The book-to-bill ratio is a widely used metric in the technology industry, specifically in the semiconductor equipment sector. It is closely watched by investors and analysts for an indication of the performance and outlook for individual companies and the technology sector. A ratio of above 1 implies that more orders were received than filled, indicating strong demand, while a ratio below 1 implies weaker demand.



Investopedia Says

Investopedia explains 'Book-To-Bill Ratio'

For example, a book-to-bill ratio of 1.10 implies that $110 of orders were received for every $100 of product billed during the period.

One of the best-known book-to-bill ratios is the monthly figure released by the Semiconductor Equipment and Materials Institute (SEMI). This is a three-month average bookings and billings figure for semiconductor equipment companies with headquarters in North America, and is a reliable indicator of trends in the worldwide semiconductor industry.

Articles Of Interest

  1.

    How To Use Price-To-Sales Ratios To Value Stocks

    Take a look at how this effective ratio can be influenced by certain critical factors.

  2. A Breakdown Of Stock Buybacks

    Find out what these company programs achieve and what it means for stockholders.

  3. 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.

  4. PEG Ratio Nails Down Value Stocks

    Learn how this simple calculation can help you determine a stock's earnings potential.

  5. Forecasting Market Direction With Put/Call Ratios

    Options are not only trading instruments but also predictive tools that can help us gauge the feelings of traders.

  6. Why are P/E ratios generally higher during times of low inflation?

    Inflation affects equity prices in several ways. Most importantly, investors are willing to pay less for a certain level of earnings when inflation is high, and more for a certain level of earnings ...

  7. Industry Handbook

    In this feature, we take an in-depth look at the various techniques that determine the value and investment quality of companies from an industry perspective.

  8. F5 Networks Takes Another Whirl In The Tech Spin-Cycle

    F5's guidance adds more fuel to the tech bear bonfire.

  9. A Big Bet On Cyber Security

    As computers, cloud computing and data networks continue to be a part of our everyday lives, protecting them is quickly becoming a hot button issue. That certainly bodes well for the firms in ...

  10. Another Stumble At TIBCO Should Lead To Uncomfortable Questions

    Another disappointing quarter makes it harder to believe in TIBCO's potential.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  2. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  3. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  4. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  5. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  6. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.
Trading Center