Book to bill

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Book to bill

The book-to-bill ratio is the ratio of orders taken (booked) to products shipped and bills sent (billed). The ratio measures whether the company has more orders than it can deliver (>1), equal amounts (=1), or less (<1). This ratio is of significant interest to investors/ traders in the high-technology sector.

Book to Bill

A ratio of orders taken to invoices sent over a set period of time. In other words, a book-to-bill ratio compares current customers (orders taken) to previous customers (invoices sent). This is a tool used to calculate whether demand for a good or service is rising or falling. A book-to-bill ratio of less than one indicates falling demand, while a ratio of greater than one shows growth, after accounting for seasonal or other fluctuation. The semi-conductor industry makes particular use of this ratio.
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The Company also stated that its book to bill ratio in the first quarter was expected to be just above 1.
Although the company's Semiconductor Products Sector is one of those segments experiencing weaker sales and profitability in the third quarter versus the second quarter, orders in that segment for the third quarter are expected to be sequentially higher resulting in a book to bill ratio of approximately 1.
The book to bill ratio is a common measure of a company's order backlog.
Last month trade body SEMI said the industry's book to bill ratio hit 1 in August, meaning bookings for new orders roughly matched billings.