What represents the best measure of profitability for a company?

Net Profit After Tax (NPAT) serves as the best measure of profitability for a company as it reflects the amount of profit remaining after all expenses, including operating costs, interest, taxes, and any other expenses have been subtracted from total revenue. This provides a comprehensive view of the company's financial performance since it accounts for all aspects of the business's operations and financial obligations.

Unlike EBITDA, which focuses on earnings before interest, taxes, depreciation, and amortization, NPAT gives a clearer picture of the net profitability after all costs have been considered. Operating Income, while a useful metric, only measures profitability from core business operations and does not include the effects of interest and taxes. Gross Profit, on the other hand, only considers revenue minus the cost of goods sold and excludes operating expenses, financial obligations, and taxes, thus not providing a full view of profitability.

Therefore, NPAT is a comprehensive and inclusive measure, making it the most effective way to assess a company's overall profitability.