The net profit margin ratio, calculated by dividing net income by total revenue and multiplying by $100$ to get a percentage, indicates the percentage of revenue that remains as profit after all expenses, taxes, and costs have been deducted. A higher net profit margin signifies better efficiency in converting revenue into actual profit. It is a critical indicator of a company's overall profitability and is used by investors and management to evaluate financial performance, cost management, and pricing strategies. This ratio helps in comparing profitability across companies and industries.