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Shares Outstanding |
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WIKI ANALYSIS| This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition. |
Shares Outstanding are the total number of common shares currently held by investors
Outstanding shares includes all stock held by investors including both common shares held by the public and restricted shares owned by the company's internal managements.
Shares outstanding are listed on a company's balance sheet under the capital stock section. Shares outstanding is used to compute a company's market capitalization and its earnings per share. A company's market capitalization is calculated by multiplying the price of one of its shares by the total number outstanding shares a company has issued.
A company also often keeps a portion of its stock in its own treasury, from both the initial stock issue as well as stock repurchases. These are called "treasury shares," and are not outstanding shares. Increasing treasury shares will decreases outstanding shares (and vice-versa).
Example
A company issues a total of 10,000 shares. 6000 shares are issued as floating shares to the general public, 2,000 shares are issues as restricted shares to company insiders, and 2,000 are kept in the company's treasury. In this case, the company has a total of 8,000 outstanding shares.
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