Finding Outstanding Shares

In the end, as the number of outstanding shares decreases by 1,000, the company’s EPS increases by 6.89%. The number of authorized shares can be substantially greater than the number of shares outstanding since authorized shares represent the maximum possible number of shares a company can issue. The outstanding number of shares may be either equal to or less than the number of authorized shares. For example, a company might authorize 10 million shares to be created for its IPO, but end up actually only issuing nine million of the shares. P/B is often used to value companies in the financial sector (i.e. banks) and is calculated by taking a company’s share price and dividing it by the book value per share.

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How do stock splits affect outstanding shares?

Outstanding shares are used to calculate key metrics for companies. Outstanding shares are all the shares issued and sold by a company that are not held by the company itself. Outstanding shares include a company’s common stock held by individual investors, institutional investors and restricted shares held by company officers and insiders. The category does not include treasury stock, which is the company’s own stock held by the company.

Further, the higher the diluted share outstanding, the more adverse impact it will have on the company’s earnings per share due to further equity dilution. The most up-to-date number of basic shares outstanding can be found in the latest form 10-K or 10-Q of a company. https://www.bookstime.com/ The information is available on the front page of these financial reports. Basic shares outstanding can be sourced from multiple places in a company’s financial statements. Below lists two commons sources starting with the preferred source if available.

Why Are Outstanding Shares Important?

This refers to a company’s shares that are freely bought and sold without restrictions by the public. Denoting the greatest proportion of stocks trading on the exchanges, the float consists of regular shares that many of us will hear or read about in the news. Many stock analysts prefer to use an adjusted measure of outstanding shares that includes the number of potential new common shares that could result from convertible securities.

• The number of shares outstanding can be computed as either basic or fully diluted.
• On the other hand, share buybacks or reverse stock splits would decrease the outstanding share count.
• Next, 336,620,000 shares were held in the company’s treasury at that time, so subtracting this from the number of issued shares means that Johnson & Johnson had 2,783,223,000 outstanding shares at the end of 2014.
• The outstanding shares figure is useful to know for an investor that is contemplating buying shares in a company.
• Floating shares serve as a good representation of the company’s active shares or share turnover among various investors in the market, excluding parties holding substantial portions of equity.
• The information provided by StockCharts.com, Inc. is not investment advice.

A company’s public float is often expressed as a figure or a percentage of the company’s total outstanding shares. For example, if a company has 10 million shares outstanding and its CEO holds 2 million of those, the company has 8 million floating shares, or 80 percent float. You can compare the differences between the figures shares outstanding formula on specific dates of the filings to find the change in outstanding shares. Companies may issue shares from time to time to fund growth or to reward executives and other insiders, so the number can vary from quarter to quarter. Similarly, companies may repurchase their own stock, reducing the outstanding share count.

Reverse Stock Split

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.

• During a share buyback, the company buys its own shares from the shares outstanding and turns them into treasury shares.
• The life of common stock goes through a few phases, and understanding each step is important for putting the common-stock-outstanding number into proper perspective.
• WASO is used to calculate the   Similar to the calculation of diluted shares outstanding, basic shares outstanding is the starting point for calculating the WASO.
• On the other hand, the fully diluted shares outstanding calculation takes into account diluting securities such as convertibles (warrants, options, preferred shares, etc.).
• Reverse splits and share buybacks decrease the number of shares outstanding.
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While the number of outstanding shares and the public float may be the same, they don’t have to be, such as in the case of one company owning the shares of another company with no plans to sell them. You can find outstanding shares in the company’s most recent annual report found on Form 10-K or on quarterly 10-Q filings. The filings will specify the number of outstanding shares on the company’s balance sheet, which is a document that lists a company’s assets, liabilities and shareholder equity.

Outstanding shares include share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders. These shares appear on a company’s balance sheet under Capital Stock. A company’s number of outstanding shares is not static and may fluctuate wildly over time.