What are outstanding stock or shares of a company?
The number of shares owned by stockholders is also known as outstanding shares (O/S). It refers to the total number of common shares issued by a company. Outstanding shares are reported on a company’s balance sheet. The number of outstanding shares is used to compute critical company metrics, such as earnings per share and book value per share. The number of outstanding shares is an essential factor when determining the number of voting rights in a company.
Outstanding share is also an essential factor for companies when determining their overall market value and market capitalization. Market capitalization is calculated as below.
Market Capitalization = Share Price * Number of Shares.
There is a difference between issued, outstanding stock, and treasury stock. Treasury stock refers to the number of shares that it has bought back or retained in its accounts.
Outstanding stock refers to the total number of shares that have been authorized, issued, and sold by a company. It also includes the total number of shares held by the public and the number of shares that the company’s officers and directors own.
To learn more about this, refer: https://www.investopedia.com/terms/o/outstandingshares.asp
Understanding what outstanding shares of a company are is crucial for
investors looking to make informed decisions. By looking at how many stocks are currently in circulation, you’ll have an idea of what your company’s total market value might be worth. Understanding these concepts will help you make better-informed investing decisions that could lead to increased profits.
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Disclaimer: The blog post is strictly for educational and informational purposes and should not be intended to be financial advice or recommendation of any kind. It is based on my personal experience, and it does not constitute professional advice. Always consult a financial adviser before making major investment decisions.
