It is the ratio decidendi that may serve as judicial precedent. Thus ratio decidendi goes hand in hand with the doctrine of judicial precedent.
Ratio Decidendi is a Latin word which means the legal reasoning behind a judgment which relates to the issues before the court. This is the binding part of a judgment that is applied by the courts to future cases with similar facts.
A ratio decidendi is always concerned with statements of law and not statement of facts. One should however be careful when reading the judgments or cases of the court because there is a distinction between ratio decidendi and obiter dictum.