What are Outstanding Shares? The Motley Fool

They determined that reducing their share count from nearly 8.8 billion to roughly 1.1 billion better aligned with this vision (1). Evaluating the trend of this number provides useful insights to investors. Importantly, the number of shares outstanding is dynamic and fluctuates over time.

How to Calculate the Number of Shares of Common Stock Outstanding

An additional metric used alongside shares outstanding is a company’s “float,” which refers to the shares available for investors to buy and sell on the open market. Shares outstanding is a financial number that represents all the shares of a company’s stock that shareholders, including investors and employees, currently own. Floating stock is a narrower way of analyzing a company’s stock by shares. It excludes closely held shares, which are stock shares held by company insiders or controlling investors. These income statement types of investors typically include officers, directors, and company foundations. Shares outstanding are the basis of several key financial metrics and can be useful for tracking a company’s operating performance.

What common stock outstanding means

It will, therefore, miss shares that have been issued but are not outstanding, such as treasury stock. Fortunately, there are other ways to discover the entire stock picture of a corporation. One simple calculation for the number of shares in a firm comes from readily available information on a stock’s market capitalization.

• When this takes place, a company’s outstanding shares increase, and a higher degree of liquidity results.
• In SEC filings, companies will report the total number of shares outstanding on a given day, but in their quarterly and annual figures they must also offer the weighted average shares outstanding.
• Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism.
• Note that the latest information on the number of shares outstanding is nearly 2 months after the balance sheet date.
• In other words, a company has issued shares and then bought some of the shares back, leaving a reduced number of shares that is currently outstanding.

Company

A company’s outstanding shares may change over time because of several reasons. These include changes that take place because of stock splits and reverse stock splits. There are also considerations to a company’s outstanding shares if they’re blue chips. Companies typically issue shares when they raise capital through equity financing or when they exercise employee stock options (ESOs) or other financial instruments. Outstanding shares decrease if the company buys back its shares under a share repurchase program.

Editorial Independence

• The number of shares outstanding consists of shares held by institutions, restricted shares held by company insiders, and shares available for investors to buy and sell on the open market.
• When you buy stock in a company, you buy a percentage ownership of that business.
• Besides, it can be helpful to understand where the numbers you’re looking at came from.
• Of course, merely increasing the number of outstanding shares is no guarantee of success; the company has to deliver consistent earnings growth as well.
• The larger stock market is made up of multiple sectors you may want to invest in.

And so in theory (and often in practice), highly-shorted stocks with a low float present ripe conditions for a so-called “short squeeze”. Understanding how to calculate outstanding shares for a public company would appear to be a simple matter. As we can see here, Apple’s basic and diluted EPS both increased year-over-year, even though their net income slightly declined. This is where to find number of shares outstanding in financial statements because they were able to decrease their shares outstanding to a greater degree than their decline in earnings. This is a great example of how share-count reductions can be an important tool for management teams to deliver value to shareholders.