key term - Outstanding shares

Definition

Outstanding shares are the total number of shares of a corporation that have been issued and are currently held by shareholders. This includes shares held by institutional investors, individual shareholders, and insiders but excludes treasury shares.

5 Must Know Facts For Your Next Test

1. Outstanding shares can be found on a company’s balance sheet under the 'Shareholders' Equity' section.
2. They are used to calculate key financial metrics such as Earnings Per Share (EPS) and Market Capitalization.
3. Outstanding shares include restricted shares owned by company insiders and employees.
4. The number of outstanding shares can change due to corporate actions like stock splits, share buybacks, or new issuances.
5. Outstanding shares do not include treasury stock, which is stock that has been repurchased by the company.

Review Questions

Related terms

Treasury Stock: Shares that were once part of the outstanding shares but were repurchased by the company.

Earnings Per Share (EPS): A financial ratio that indicates how much profit a company makes for each share of its stock.

Stock Split: An action taken by a company to divide its existing shares into multiple ones to boost liquidity.