CERTIFIED FINANCIAL STATEMENTS Definition

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CERTIFIED FINANCIAL STATEMENTS are financial statements that have undergone a formal audit by a certified public accountant and usually contain statements of certification by the CPA.

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RETURN ON STOCKHOLDERS EQUITY is a measure of how profitably the company is utilizing shareholders funds. It is calculated: profit after tax + total stockholders equity. Also called RETURN ON NET WORTH.

BASIS, generally, is that figure or value that is the starting point in computing gain or loss, depreciation, depletion, and amortization of a company. Specifically, it is the financial interest that the Internal Revenue Service attributes to an owner of an investment property for the purpose of determining annual depreciation and gain or loss on the sale of the asset. If a property was acquired by purchase, the owners basis is the cost of the property plus the value of any capital expenditures for improvements to the property, minus any depreciation allowable or actually taken. This new basis is called the ADJUSTED BASIS.

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