SRM 5.1 and SQL server on same host ?

We are in the process of setting up SRM 5.1 with SQL server as the database.

My question is , is it  alright, if I setup the database also on the same server I install SRM?

Or do the database and the  SRM  has to be on  separate servers . I don't see a reason of any kind why can't I have both on the same server.

Thanks

J  James