What does the Net Profit Margin indicate?

The Net Profit Margin is a financial metric that indicates a company's profitability after all expenses have been deducted from total revenue. It reflects how much of each dollar in sales translates into profit. This margin is expressed as a percentage, giving investors and stakeholders insight into the efficiency of the company's management in turning revenue into actual profit.

Understanding the Net Profit Margin is crucial for assessing a company's financial health. A higher margin suggests that a company is effective at managing its costs and converting sales into profit, while a lower margin may indicate inefficiencies or higher expenses relative to revenue.

In comparison, the other options relate to different aspects of a company's financial performance but do not accurately define the Net Profit Margin. Revenue generated per employee pertains to productivity metrics, total expenses relative to revenue suggests a profitability ratio, and sales growth compared to last year focuses on revenue changes rather than profitability metrics. Therefore, the choice that best defines what the Net Profit Margin indicates is indeed the company's profitability after all expenses.