What does a 4% cap rate mean?

Excuse me, could you please explain what exactly is meant by a "4% cap rate" in the context of real estate or investment properties? I'm trying to understand how it relates to the potential profitability and return on investment for a given property. Is it a measure of the annual net operating income as a percentage of the property's value, and if so, how does it impact an investor's decision-making process?