The common ratio is a key concept in mathematics, particularly in the study of geometric sequences. It refers to the constant factor that each term in the sequence is multiplied by to obtain the next term. For example, in the sequence 2, 6, 18, 54, the common ratio is 3, since each term is three times the previous one. In a geometric sequence, the common ratio can be found by dividing any term by the term that precedes it. This ratio remains the same throughout the sequence. Understanding the common ratio is essential for solving problems related to exponential growth and decay, as well as in financial calculations involving compound interest.