What does Book to Bill mean?

This is a semiconductor book to bill ratio. Book to bill reports on the sum of all semiconductor chips being booked for delivery, comparing them with the ones that firms have already billed for.

The book to bill is a ratio used by the tech industry to show the relation between demand and supply for orders on a so called ‘firm’s book’ and for the number of these orders filled.

The ratio actually shows whether the firm has more orders than it can cope with, provided that it is greater than 1, or if it has exactly the same amount if orders as intended, if the ratio equals 1, or the firm has less orders than it can possibly deliver, when the ratio is less than 1. The figure is calculated on a monthly basis, and it is frequently used for firms in the chip, or semiconductor, and technology sector.

It is basically a ratio of orders that are booked to the orders that are to be delivered, and later invoiced, during a set period. It can indicate the trend of a business, given that the ratio’s figure is grater than 1, indicating improvement in performance, or if it is below 1, indicating a decline in business.