The modulation index ($m$) for AM is defined as the ratio of the amplitude of the modulating signal ($A_m$) to the carrier amplitude ($A_c$).

• If $m\le 1$, the carrier is correctly modulated.
• If $m>1$, the condition is called overmodulation. In this state, the carrier amplitude periodically drops below zero, causing the phase of the carrier to reverse and 'clipping' the bottom of the envelope. This leads to severe envelope distortion and the generation of unwanted sideband frequencies (splatter), making the signal difficult or impossible to demodulate correctly.