Book-To-Bill Ratio

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 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.



comments powered by Disqus
Hot Definitions
  1. Quanto Swap

    A swap with varying combinations of interest rate, currency and equity swap features, where payments are based on the movement of two different countries' interest rates. This is also referred to as a differential or "diff" swap.
  2. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  3. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  4. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
  5. Centralized Market

    A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.
  6. Balanced Investment Strategy

    A portfolio allocation and management method aimed at balancing risk and return. Such portfolios are generally divided equally between equities and fixed-income securities.
Trading Center