Transmission ratio and final drive
A transmission gear ratio multiplies engine torque before sending it to the differential. The final-drive ratio multiplies it again. Multiplying the two gives the overall ratio between engine and axle for that gear.
How tire diameter changes effective gearing
A taller tire travels farther per revolution, effectively making the gearing taller. That lowers engine RPM at a given road speed but also reduces mechanical leverage at the tire. A shorter tire does the opposite.
The common road-speed formula
The formula is theoretical. Converter slip, clutch slip and loaded tire diameter can shift the real number.
Choosing a final-drive ratio
Numerically higher axle ratios generally increase engine RPM at cruise and increase torque multiplication. Numerically lower ratios generally reduce cruise RPM. The best choice depends on transmission ratios, tire size, powerband and how the vehicle is used.