Specialized ratios are sometimes used in specific industries. For example, the so-called book-to-bill ratio is closely watched for semiconductor manufacturers. A ratio of .93 indicates that for every $100 worth of chips shipped over some period, only $93 worth of new orders were received. In December 2010, the semiconductor equipment industry’s book-to-bill ratio was .90, compared to .97 during the month of November 2010. The book-to-bill ratio reached a recent low of .47 during January 2009 and a recent high of 1.23 during July 2010. The three-month average of worldwide bookings in December 2010 was $1.7 billion, an increase of 8.7 percent from November 2010, while the three month average of billings was $1.5 billion, a 1.4 percent decrease from November 2010. What is this ratio intended to measure? Why do you think it is so closely followed?
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