Scan the manual of any piece of audio equipment and you’ll likely find a specification called Total Harmonic Distortion (or THD for short). This specification can be found on speakers, headphones, media/MP3 players, amplifiers, preamps, receivers, and more. Total Harmonic Distortion is important when considering equipment, but only to a certain extent.
The Total Harmonic Distortion specification compares the input and output of audio signals, with the difference in phase measured as a percentage. So you might see a THD listed as 0.02 percent with specified frequency and equivalent voltage terms in parentheses (for example, 1 kHz 1 Vrms).
There is a bit of math involved in calculating Total Harmonic Distortion. But all you need to understand is that the percentage represents the harmonic distortion or deviation of the output signal. Lower percentages are better.
An output signal is a reproduction and never a perfect copy of the input, especially when multiple components are involved in an audio system. When you compare the two signals on a graph, you may see small differences.