What is the cache hit ratio?

What is the cache hit ratio, what impact does it have on performance of an Oracle database and what is involved in tuning it?

When the cache client like a CPU, web browser etc finds a successful entry in the cache memory, it is called as a cache hit. The percentage of these successful cache hits is called as cache hit ratio. Higher the cache hit ratio better will be the performance because data read from the cache is faster than the memory.