A PCM signal is a sequence of digital audio samples containing the data providing the necessary information to reconstruct the original analog signal. Each sample represents the amplitude of the signal at a specific point in time, and the samples are uniformly spaced in time. The amplitude is the only information explicitly stored in the sample, and it is typically stored as either an integer or a floating point number, encoded as a binary number with a fixed number of digits: the sample's bit depth, also referred to as word length or word size.

The resolution indicates the number of discrete values that can be represented over the range of analog values. The resolution of binary integers increases exponentially as the word length increases. Adding one bit doubles the resolution, adding two quadruples it and so on. The number of possible values that can be represented by an integer bit depth can be calculated by using 2^n, where n is the bit depth. Thus, a 16-bit system has a resolution of 65,536 (2^16) possible values.
What does "16-bit" mean when referring to digital audio?
Converting sound into a digital format requires taking samples of the original sound wave at regular points in time. These samples numerically represent the relative strength, or amplitude, of the analog wave as it varies over time. For digital audio, these numbers are recorded in binary notation. When digital audio is advertised as 16-bit, we mean that the numerical samples of the artist's recording were recorded as 16 digit-long binary numbers.