Shares outstanding are all the shares of a corporation that have been authorized, issued and purchased by investors and are held by them.
There are two types of shares outstanding and they are;
- Basic Share.
- Fully Diluted Share.
Basic shares are the number of outstanding stocks currently outstanding, however, fully diluted shares outstanding tells you how many outstanding shares there could potentially be.
Formula to calculate shares outstanding.
Issued stock is the total number of a company’s shares that have been sold and are held by shareholders.
Treasury shares are the shares which are bought back by the issuing company, reducing the number of shares outstanding on the open market.
Example:
If a company issues 1000 shares and 200 shares are kept in the company’s treasury, determine the company’s shares outstanding.
Therefore, the company has a total of 800 shares outstanding.
