Wordorigins.org

Often in old war movies you’ll hear a radio operator say, “I read you five-by-five.” What does this mean?

The operator in question is ranking the voice transmission on a scale of one to five in two categories, strength and clarity. So, five-by-five is loud and clear and one-by-one would be weak and unintelligible. From Evan Hunter’s 1954 Blackboard Jungle:

“All right, testing, one-two-three-four."..."Five by five, Mr. Halloran!”

By the 1980s, it had acquired a general slang sense of okay, fine. From Rick Eilert’s 1983 For Self and Country:

“I hope everything’s all right.”
“Yeah, everything is five by five.”

(Source: Historical Dictionary of American Slang)