Subject: Analysis - Book-to-Bill Ratio

Last-Revised: 19 Aug 1993
Contributed-By: Timothy May

The book-to-bill ratio is the amount of business "booked" (orders taken) divided by the amount of business "billed" (products shipped and bills sent).

A book-to-bill ratio of 1.0 implies incoming business = outgoing product. Often in downturns, the b-t-b drops to 0.9, sometimes even lower. A b-t-b of 1.1 or higher is very encouraging.

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