Value and Priority of Skills
I'm going to explain this topic without using any hard examples from the games I play (Wildstar and Guild Wars 2 currently). You can apply this to any game though and it's just simple math that no one really cares much about probably.
Someone Else Did It
Most of the time if you play a game and you want to play something better than that somehow more or less random via gut feel constructed build of yours. So you start to search for "builds" on google. Slap your class on that search and you'll most likely end up with a good build, some website that contains builds or the meta build that is highly appraised, everyone plays and either loves or hates.
Evaluate Skills
There are several ways to evaluate skills in comparison to a game. One way to compare skills is by comparing the total damage they do. The problem here, however, is that we look at the burst, high damage in a low amount of time.
For example, we have a skill A that deals 1207 damage and a cooldown of 5 seconds and
a skill B that deals 612 damage and a cooldown of 2 seconds.
Now in the heat of the moment, of course, our skill A deals 1207 damage and skill B only 612 damage. That means skill A has a higher burst. This would be useful if an encounter requires players to throw out as much damage as possible as fast as possible.
However, if we want to go with the highest DPS, this would not be it. Of course, the burst damage of skill A is higher but skill B can be activated more often. 2.5 times more often. So in this case, until we deal with our 1207 damage of skill A again we deal with the damage of skill B 2.5 times as often. That sounds tedious to compare this way and there is another way. When we have or calculate the total damage a skill does we can divide this number by the cooldown. If a skill has a cast time or activation time this time is added on the cooldown. We want the time between the first appliance of damage and the second appliance of damage. Let's compare our skills this way:
Skill A deals 1207 damage with a cooldown of 5 seconds. That's 1207 / 5s = 241 damage per second.
Skill B deals 612 damage with a cooldown of 2 seconds. That's 612 / 2s = 306 damage per second.
Look at that. Now Skill B is better.
What About Damage over Time?
It makes no difference. Just sum up the total damage. Let's say we have a skill C that deals 320 damage and does a DoT (Damage over Time), for example bleeding dealing 52 every second for 8 seconds with a cooldown of 3 seconds.
If we sum the damage up we get 8 * 52 + 320 = 736 total damage. Now we can divide it by its cooldown and we get 736 / 3s = ~245.33 damage per second.
As you can see it works just as usual.
What Do I Need This For?
When a new patch that changed a lot or brought in balancing gets released it takes a short while for guilds and people to do the theorycrafting and create the builds. Sometimes these people don't have the time to do all the numbers on paper or maybe they're not doing the math but just try it out on a "target dummy" or "target golem". Whatever the case may be, you can calculate the value of a skill this way and set some priorities for your skills when playing. Skills with higher damage per second have a higher priority to be used.