Explanation of Outstanding Shares
Posted by Blain Reinkensmeyer
May 30, 2007 at 5:14 pm
Outstanding shares is pretty important, especially when conducting fundamental analysis. Following this post I am going to explain Earnings Per Share (EPS), and well, you can’t understand EPS without understanding outstanding shares! But, lucky for you this is Stock Trading 101, and everything is simple.
Definition
Outstanding shares by definition is the total number of shares held by all investors. This includes restricted shares which are shares owned by company’s officers and insiders, and shares of stock held by the general public. Easy right?
The only time you are going to confuse yourself is when you run into the float, which is NOT the same as outstanding shares. The Float is the total number of outstanding shares LESS shares held by insiders (restricted shares). It is the total number of trade able shares.
Finding Outstanding Shares
You can find the total number of outstanding shares by looking at a company’s balance sheet; it will be listed under “Capital Stock”. You can also find it very easily on sites like yahoo finance under key statistics, on reuters.com, etc.
[...] calculate the market cap, all you simply have to do is take the total number of outstanding shares, then multiply that number by the current share price. Let’s look at Exxon Mobil (XOM) for [...]
[...] calculate Earnings Per Share, you simply divide the net income by the total outstanding shares. So, let’s take an example and say that company XYZ had $50 million in net income for the [...]
[...] (MSFT), the stock trades around $30 a share which is pretty cheap, but also has over 9 billion shares outstanding. The other extreme is Berkshire Hathaway (BRKA) which is the most expensive stock in the world. The [...]