We define the signature of the permutation $\sigma$:
$$\epsilon(\sigma)=(-1)^N$$
where $N$ is the number of inversion.
Let $\sigma$ and $\tau$ two permutations with $P$ and $Q$ inversions respectively. The inversions of the composition $\tau \sigma$ are:
the inversions $\{i,j\}$ of $\sigma$ s.t $\{\sigma(i),\sigma(j)\}$ is not an inversion for $\tau$
The pairs $\{i,j\}$ which is not inversions of $\sigma$ s.t $\{\sigma(i),\sigma(j)\}$ is an inversion of $\tau$.
If we add the numbers of inversions of $\sigma$ and $\tau$ we have twice the number $R$ of inversions $\{i,j\}$ of $\sigma$ s.t. $\{\sigma(i),\sigma(j)\}$ is also an inversion of $\tau$. So the total number of inversions of $\tau\sigma$ is $N=P+Q-2R$. The signature of $\tau\sigma$ is
$$\epsilon(\tau\sigma)=(-1)^{P+Q-2R}=(-1)^P(-1)^Q=\epsilon(\tau)\epsilon(\sigma)$$