What does order book mean?
An order book is the value of work a company has won but not yet delivered. It is also called the order backlog.
Companies that build projects or sign long contracts report it. Think engineering, construction, defence and IT services firms.
How do order inflow and order book connect?
Order inflow is the value of new orders won in a period. The order book at the end of the period is roughly the opening book, plus inflow, minus the work delivered.
Cancellations and currency moves also change it, so the sum is not always exact.
Where does a real company report it?
Larsen & Toubro reports group order inflow and its consolidated order book every quarter. Its results press release also gives the international share of both.[S1]
IT services firms use a similar measure. TCS reports the total contract value, or TCV, of deals it signs.[S2] TCV counts a contract's value over its whole life, not one year.
Why is it compared with revenue?
Dividing the order book by a year's revenue shows how many years of work are already booked.
It is not a promise of future revenue. Orders can be delayed, cut or cancelled.
Where do you see it on Cityfort?
The TCS stock page, for example, covers its deal wins in "Where growth could come from". The block below shows yearly revenue for companies on Cityfort, the number an order book is usually compared with.