Which of the following ratios is a measure of profitability related to net income?

The net profit margin is a key indicator of profitability because it measures how much of each dollar of revenue is converted into profit after all expenses have been deducted. This ratio is calculated by dividing net income by total revenue, which helps assess a company's efficiency in managing its costs relative to its sales. A higher net profit margin indicates better profitability and operational efficiency, suggesting that the company retains a good portion of its revenue as profit.

While other ratios mentioned serve important purposes—such as the debt-to-equity ratio reflecting a company’s financial leverage or the current ratio assessing short-term liquidity—the net profit margin is specifically focused on profitability derived from net income. Additionally, return on assets also measures profitability but in relation to total assets rather than solely net income, making net profit margin distinct in its direct focus on income performance relative to sales.