pulleys or sprockets set the ratio... chain or belts transfer the energy. ratio (to keep it simple) means how many revolutions it takes for the drive gear to rotate the driven gear once. So, in a 5:1 ratio, it takes the drive gear 5 revolutions to turn the driven gear/sprocket 1 time. For small engine setups, the drive gear is typically a part of the clutch and is driven by the crank. The driven gear is the sprocket and is attached to the axle or hub. The best way to think about it in our setups is that the closer you get to 1:1 ratio the more load you put on the engine the more top speed(assuming that the power is there) and the worst wear on your clutch, but the farther you get from 1:1 obviously the less load, but at a sacrifice of top speed and the benefit of less clutch wear. To get your ratio divide the driven(sprocket) by the drive(clutch) such as 60 tooth sprocket divided by a 12 tooth clutch = 5:1. I hope this helps a little... Oh yeh, with a pulley, its the circumference of the driven divided by the circumference of the drive pulley