Compression ratios are generally used to represent how good a compression algorithm is at compressing. Generally, this is represented as the uncompressed size divided by the compressed size, yielding a number (hopefully) greater than 1. The higher the compression ratio, the better the compression algorithm is.
Equation from Wikipedia
It should also be noted that a better compression ratio does not always indicate a better compression algorithm. Some algorithms are designed to give a moderate compression ratio with very good speed, while others are focused on good compression ratios and moderate speed. The use case of a compression algorithm are what determines what factors of a compression algorithm are favorable. For example, when streaming video you must be able to decode each frame relatively quickly, but when downloading a large game it may be preferable to download a smaller file and take time to decode the compressed files.
Some good resources to learn more about compression algorithms include:
- Data compression ratio on Wikipedia
- Comparison of Algorithms (helpful to see how compression ratios are compared)
- Comparison of Different Compression Algorithms (helpful to see how compression ratios are compared)