The Fool FAQ

Book-to-Bill Ratio

The Fool FAQ

Every month, the investing world breathlessly awaits the Book-to-Bill Ratio. Is this anticipation warranted? Just what is the BTB and why should any of us care about it?

The book-to-bill (BTB) ratio is a loose measure of American semiconductor demand.

The "book" in "book-to-bill" refers to orders booked. An order is booked when a company calls up a semiconductor manufacturer and orders some chips.

The "bill" in "book-to-bill" refers to orders billed. An order is billed when it is sent out to the company that ordered it and they have to pay for it.

The book-to-bill ratio is a measure of the total orders