Decimal odds convert directly into the market's implied chance: probability = 1 ÷ odds. A 4.0 shot is priced at 25%. Add up every runner's implied chance and you get the book percentage.
Reading the book
A bookmaker's book is usually well over 100%; the excess is their margin. Exchange books on busy races sit very close to 100% because backers and layers compete for the price. A book well above 100% on the back side, or well below on the lay side, is a sign of a thin market.
Worked example
Three runners at 2.5, 3.5 and 5.0: 40% + 28.57% + 20% = 88.57%. The rest of the field accounts for the remaining 11.43%.
Questions
What are normalised probabilities?
The implied chances scaled so the field adds up to exactly 100%, removing the margin. The fair price is 1 ÷ the normalised probability.