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When gambling, odds are often the ratio of winnings to the stake and you also get your wager returned. So wagering 1 at 1:5 pays out 6 (5 + 1). If you make 6 wagers of 1, and win once and lose 5 times, you will be paid 6 and finish square.

Odds - Wikipedia
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If there are more horses, the each way bet will cover more places and be more lenient with how you can win. In this example, the bookie is paying 6 places and the terms are 1/5. This means if the horse comes in positions 2-6, you will win a bet at odds of 3.00 (2/1), as this is one-fifth of the original 10/1 odds.

Each Way Bet Calculator | Horse Racing Calculator - OddsMonkey
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