What is a power factor and how is it related to electrical power systems?

The power factor is a measure of the efficiency of an electrical system. It is the ratio of the real power (measured in watts) to the apparent power (measured in volt-amperes) in an electrical circuit. A power factor of 1 indicates that all of the electricity being transmitted is being used effectively, while a power factor of less than 1 indicates that some of the electricity is being wasted.