Specialized ratios are sometimes used in specific industries. For example, the so-called book-to-bill ratio is closely watched
Question:
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 November 2016, the semiconductor equipment industry’s book-to-bill ratio was .96, compared to .91 during the month of October 2016. The book-to-bill ratio reached a recent low of .47 during January 2009 and a recent high of 1.23 during July 2010. What is this ratio intended to measure? Why do you think it is so closely followed?
Step by Step Answer:
Fundamentals of Corporate Finance
ISBN: 978-1260153590
12th edition
Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan