Definition
Backlog represents the dollar value of orders that have been received but not yet completed and recognized as revenue. A growing backlog indicates strong future revenue visibility. It's particularly important for manufacturing, construction, defense, and software companies with multi-year contracts.
Formula
Backlog = Beginning Backlog + New Orders - Revenue Recognized
Example
A defense contractor has $50B backlog representing 3 years of future revenue, providing excellent visibility.
FAQ
What is Backlog?
The value of orders received but not yet fulfilled.
How do you calculate Backlog?
A common formula for Backlog is: Backlog = Beginning Backlog + New Orders - Revenue Recognized
Why is Backlog important?
Backlog helps investors evaluate fundamental analysis and make more informed decisions.