Ratios are used in business to compare companies of different sizes within the same industry. The goal is to discover the best investment for return on your stock purchase. Business ratios essentially equalize different size companies within the same industry. A common mistake is to compare two different industries within the same sector (explained below).
Operating ratios are a different term referring to performance ratios. These ratios are strictly income statement (profit and loss statement) activity based. They include Gross Profit Margin, Operating Profit Margin, Net Profit Margin, Return on Equity and Return on Assets.