Manufacturing, autos and logistics
Backlog (order book)
The value of orders a company has received but not yet delivered.
Last reviewedWhat does Backlog (order book) mean?
Backlog, or the order book, is the value of firm orders that a company has won but not yet turned into revenue. It shows how much future work is already secured, which matters in aerospace, defence, shipbuilding, construction and heavy equipment. Example: a company with a backlog of 12 billion and yearly revenue of 4 billion has about three years of work in hand. Check its quality: some orders can be cancelled or delayed, and a backlog priced before costs rose may carry low margins. Airbus and Boeing hold backlogs of many years of aircraft production.
Where does it come up in case interview prep?
- How industrial companies make money: equipment, aftermarket and backlogLesson in Industrial manufacturing, machinery and aerospace
- Industrial and aerospace players, trends 2024 to 2026, and how to crack the casesLesson in Industrial manufacturing, machinery and aerospace
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- Professional services players, trends 2024 to 2026, and how to crack the casesLesson in Professional services: consulting, audit, law and IT services
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Related terms
- Book-to-bill ratioNew orders received divided by revenue billed in the same period.
- Installed baseThe number of a company's machines or systems currently in use at customers.
- RevenueMoney earned from sales, before costs.
- OEM (original equipment manufacturer)In autos and machinery, the company that designs, assembles and brands the final product.
- Tier 1 supplierA supplier that sells complete parts or systems directly to the carmaker.
- Vehicle platformA shared set of engineering underpinnings used for many car models.
- Battery pack costThe cost of an electric vehicle's battery pack, usually quoted per kWh of capacity.
- AftermarketParts, service, repairs and upgrades sold after the original equipment.