# Book-to-Bill Ratio

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## What Is the Book-to-Bill Ratio?

A book-to-bill ratio is the ratio of orders received to units shipped and billed for a specified period, generally a month or quarter. It is a widely used metric in the technology industry, specifically in the semiconductor equipment sector.

Investors and analysts closely watch this ratio for an indication of the performance and outlook for individual companies and the technology sector as a whole. A ratio above one implies more orders were received than filled, indicating strong demand, while a ratio below one implies weaker demand.

## The Formula for the Book-to-Bill Ratio Is:

Book to Bill=Orders ReceivedOrders Shipped\text{Book to Bill} = \frac{\text{Orders Received}}{\text{Orders Shipped}}Book to Bill=Orders Shipped