(last updated: 07/31/19)
The following is a breakdown of our Ratio system, which is used to measure how relatively powerful and talented a character is. It's similar to the Ratio System used in Capcom vs. SNK, only expanded; we use Ratios 0 through 8.
Note: "Ratios" are solely an OOC term. When they're used in tournament postings as a means of determining who may enter, assume some other set of requirements were ICly present that amount to an IC equivalent of 'Ratios.' In any case, ICly saying "Ryu is a Ratio 5 fighter!" makes no sense; everyone will stare at you and wonder what kind of moron you are.
Starting Ratio: FCs have their Ratio already set by staff. Fighter OCs can start at Ratio 1 or 2. Social OCs are all Ratio 0. EX OCs can start higher (see EX OCs for more).
Ratio 0: Normal, everyday people ('the faceless masses') are Ratio 0. So are all Social Characters. Ratio 0s are not trained to fight very well; at best they might know one or two 'neat tricks' for self-defense, but overall they're not capable of fighting well. Even generic thugs can make short work of Ratio 0s.
Ratio 1: The first 'fighter Ratio' there is. Ratio 1s tend to be beginner fighters, people only recently getting into fighting and having mild talent for it. Most 'generic' police and soldiers are also Ratio 1, as are most of the enemies you kept running into over and over in Final Fight. Iincyo/Chairperson (from Project Justice) is a good example of a Ratio 1 character.
Ratio 2: "Average fighters." Despite the term, Ratio 2s are extraordinary people compared to most of the world's population; only perhaps a thousand people on the planet rival their skills, and a couple hundred exceed them. Most Feature Characters here are Ratio 2 or above. Joe, Shoma, and Hinata are all examples of Ratio 2 characters.
Ratio 3: Very good fighters. Many R3s are at least moderately famous, and probably have a modestly sized group of fans. R3s show real genius and talent in their fighting, and it's not uncommon to see them be Team Captains. Many fighters never proceed beyond Ratio 3, but getting here is impressive in its own right. King, Akira, and Kim Kaphwan are examples of Ratio 3s.
Ratio 4: Almost top-tier fighters. They may be just a few notches shy of mastering their style. Ratio 4s tend to be very famous people, with a notable following of fans. They're big names when they sign up for a tournament, and only mere dozens of people alive can match or exceed their prowess. Daigo, Benimaru, and Ryo are examples of Ratio 4s.
Ratio 5: Spectacular fighters, the cream of the crop. The number of people who exceed Ratio 5s in talent can be counted on one hand. Ken, Kyo, Iori, Sagat, Billy, and so forth are Ratio 5s. They can be considered to be masters of their chosen style, though there may still be room for tiny bits of improvement here and there. This is the pinnacle of acheivement for all but a very select few.
Ratio 6: Those few fighters who are not only masters of their style but also possess incredible inner power or talent reach this state of fighting mastery. Only a small handful of humans have reached this level, and their abilities can strike awe--and sometimes terror--into others.
Ratio 7: Superhuman beings such as Goenitz are Ratio 7, as is Akuma/Gouki, and Oro, who has attained near-perfection of his body. Of course, since none of these characters are open for apps, you're only likely to see them during TPs. They have abilities somewhat beyond most humans--even Ratio 6s should be cautious of them.
Ratio 8: Godlike beings such as Orochi itself are Ratio 8. They wield incredible power, and their actions are the stuff of history and/or legend. Of course, most Ratio 8s that once existed have passed on; Greek Goddess Athena is one of the few who remains, and her soul will exist only as long as Athena Asamiya lives. (Athena Asamiya herself isn't Ratio 8, but Athena the goddess is.) You'll probably see no more than one or two Ratio 8s on MotM the entire time you're here, and probably less than that. We just don't see much point in parading around semi-gods.