Consider a hypothetical example in which a company expects to receive USD 6 million over the next 12 months and sells USD 3 million of that with FX forwards. Its hedge ratio is 50%. The higher the ratio, the less the yen amount received depends on the exchange rate, but the smaller the gain when the rate moves in the company's favor. If actual receipts fall short of the forecast, a higher ratio makes it more likely that some forwards are left with nothing to hedge.
Some companies set the share to hedge in internal rules. A company decides the hedge period and volume, and records items such as the hedge ratio to check them against its risk management policy.