Shares Outstanding: Types, How to Find, and Float

This is a figure calculated by the company itself; investors literally do not have the access to the data required. A company’s number of shares outstanding is the number of shares investors and company executives currently own, while the number of issued shares is the number of shares that have ever been traded in the stock market. A company’s number of issued shares includes any shares the company Certified Public Accountant has bought back and now holds in its treasury. The term “float” refers to the number of shares available to be traded by the public and excludes any shares held by company executives or the company’s treasury. The number of shares outstanding increases whenever a company undertakes a stock split.

Understanding Outstanding Shares – Meaning, Example, Formula

• Now that we have built the foundation of outstanding shares, let’s understand the formula to calculate outstanding shares.
• A company also often keeps a portion of its total outstanding shares of stock in its treasury from both initial stock issues and stock repurchase.
• From the previous example, we know that this company has 1,000 authorized shares.
• Treasury stock consists of shares that the company has acquired in a buyback.
• For a blue chip stock, the increased number of shares outstanding due to share splits over a period of decades accounts for the steady increase in its market capitalization and concomitant growth in investor portfolios.
• These figures are generally packaged within the investor relations sections of their websites, or on local stock exchange websites.

Along with individual shareholders, this includes restricted shares that are held by a company’s officers and institutional investors. In addition to listing outstanding shares or capital stock on the company’s balance sheet, publicly traded companies are obligated to report the number issued along with their outstanding shares. These figures are generally packaged within the investor relations sections of their websites, or on local stock exchange websites. Corporations have a certain number of authorized shares of common or preferred stock. However, just because a corporation is authorized to issue stock doesn’t mean that it has to issue all of those shares.

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For example, the price-to-earnings (P/E) ratio calculates how much investors are paying for $1 of a company’s earnings by dividing the company’s share price by its EPS. The term shares outstanding is defined as the total number of shares a company has issued to date, after subtracting the number of shares repurchased. Shares Outstanding represent all of the units of ownership issued by a company, total shares outstanding formula excluding any shares repurchased by the issuer (i.e. treasury stock). Authorized shares refer to the largest number of shares that a single corporation can issue.

Issued Vs. Outstanding Vs. Authorized

Weighted average shares outstanding is used as a substitute for the number of outstanding shares in some equations while calculating important financial ratios. In particular, when a company issues stock that has a par value, the balance sheet will typically have numbers you can use to calculate issued shares. The weighted average number of shares is determined by taking the number of outstanding shares and multiplying it by the percentage of the reporting period for which that number applies for each period. In other words, the formula takes the number of shares outstanding during each month weighted by the number of months that those shares were outstanding. While outstanding shares determine a stock’s liquidity, the share float—shares available for public trading – plays a crucial role.

Stock Splits and Reverse Stock Splits: Share Count Effect

As we already explained, shares that can be freely bought and sold by public investors are called the float. This value changes depending on whether the company wishes to repurchase shares from the market or sell out more of its authorized shares from within its treasury. A stock split occurs when a company increases its shares outstanding without changing its market cap or value. A company’s outstanding shares, the total shares held by shareholders excluding treasury stock, can fluctuate due to various factors.