The gear ratio, is literally the number of teeth on one gear arithmetically compared to the number of teeth on a different gear. The most common method of making the comparison is to divide one of the "teeth" numbers by the other.
Usually, the larger number of teeth on a chain ring is divided by the smaller number of teeth on the rear cog. Thus, you might say for a ratio of 2.34, that for every one tooth on the rear cog there are 2.34 teeth on the chain ring. Though in mathematics, you could divide the smaller by the larger and still be correct. The "gear inch" method isn't the gear ratio. But it's still a pretty neat way of showing the relationship between the gears of both the chainring, the rear cog, and the wheel size. There's another one that Sheldon Brown likes where you introduce the length of the crank arm and arithmetically compensate for its affect.