Calculate profitability and asset management ratios using sales and receivables data.}

- Because sales revenue is such a key component of a company's success, analysts are interested in a large number of ratios that incorporate sales.

- Many of these ratios attempt to measure how much profit the company is making on sales. These ratios are called profitability ratios and include:

- gross profit margin

- operating margin

- net profit margin

- Analysts are also concerned with asset management. Asset management refers to how efficiently a company is using the resources at its disposal.

- Two of the most widely used asset management ratios are accounts receivable turnover and the average collection period ratios.