Hi,
Sometimes you might have heard of terms like booking, billing or backlogs. And you might know what it means. Here is some briefing on it.

Booking:
This is a received order. When you receive an order to supply 10000 books of ‘Lifecycle toolkit’, thats a booking! In short, you booked an order for 10000 books.

Billing:
When you supply all / part of the booked order, you then go ahead and bill it. Say you delivered 5000 books, then the billing is for 5000 books.

Backlog:
When you delivered only 5000 books against the order for 10000, then the backlog is 5000 books.

Now what is the book to bill ratio?
So now you booked an order for 10000 books at price $4 and delivered 5000 at price $4 . So
B to B ratio =10000*4/5000*4 = 2

What does it tell ?
Well, it could say a number of things depending on which side of the view you see. It could mean that you are twice as fast in bagging orders than your delivery team is capable of. It could mean that the sales team is really good. Or that the delivery team is sloppy.

If the book to bill ratio is high, and if your company is in a highly competitive scenario, over the long term, your company will lose business to its competitors because it receives orders for more, but delivers less.

A book to bill ratio of 1 could mean that your sales team is not doing a great job of selling or it could be that the delivery team is doing a fantastic job of supplying things in entirety on time.

Is it this simple?
No. Sometimes you have a book to bill of 2. But you see that the bookings were done at a price of $4 , but were billed at $2. And you supplied all the books. In that case, the price per unit is actually dropping. There could be other scenarios too.

The booking process comes from sales and order management systems, billing from financial systems and backlog comes from manufacturing and distribution systems.

PS: I may not be correct entirely. Please feel free to point out mistakes.