The use of depth factors in electrical prospecting is critically reviewed. The use of depth factors is placed on a rational foundation. This is accomplished by assigning new physical significance to the so-called apparent resistivities and potential drop ratios measured by electrical methods. It is shown that these measurables may be considered as broadly averaged representations of the distribution of electric images with depth. As a result, universal depth factors exist which may be calculated one for all for any given electrode arrangement. The depth factors are calculated for a number of commonly used electrode arrangements and are found to be smaller than generally assumed. The potential drop ratio method is shown to be superior to the apparent resistivity method in regard to depth of reference as well as to resolving power. The resolution by either method, however, is found to be entirely inadequate to give anywhere near the detail obtained with well logs. The new approach adopted in this paper leads to quite simple and practical methods of analysis and direct solution of the interpretation problem which are illustrated. These methods are shown to have a useful field of application also in gravitational interpretation. The extent to which a detailed analysis justifiably may be carried is briefly examined. From the point of view of practicability it is reaffirmed that the best field of application of the electrical methods is the investigation of horizontal changes such as the mapping of faults and salt dome flanks.