The Page Rank is a value placed on a page in relation to it's worth on internet according to Google. Google uses this Page Ranking system to determine the importance of your page. This is important in relation to the search results showed once searching for a specific keyword.
To calculate Page Rank Google takes the into account the inbound links ( links coming into your site) and outbound links (linking out from that specific page).
Google published the exact equation of the Page Rank algorithm when it was released:
PR(A) = (1-d) + d(PR(t1)/C(t1) +…..+ PR (tn)/C(tn)
From this equation we can say a page rank 5 site with minimal outbound links ( say 8) is worth more than a Page Rank 8 site with 1000 outbound links. The "link juice" is distributed evenly.
Many people believe that this is only one factor of the Page rank and many more will be discussed.