Backlog

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This is the total value of sales orders that have not been completed.

This metric is commonly used in various Manufacturing industries to determine the value of incomplete or outstanding orders. Backlogs generally occur because of a shortage of labor and/or supplies.

Backlog is calculated by summing the sales price of all outstanding orders. For example, if Boeing can make one aircraft per day but receives an order for 4 planes priced at $1,000 each one day, its backlog at the end of the day will be $3,000 (3*$1,000).

An increasing backlog could mean that the company's sales are higher than usual or the company is experiencing production issues. A declining backlog could mean that the company's sales are decreasing or the company's production efficiency has improved.

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