How To Find Total Number Of Shares

Shares Outstanding Formula (Table of Contents)

Formula
Examples
Estimator

What is the Shares Outstanding Formula?

The term "shares outstanding" of a business refers to the number of authorized shares that are being either held past the promoters of the visitor or sold to the public shareholders while excluding the number of treasury stocks that have been bought back by the company itself. In other words, shares outstanding indicates the number of shares of a company available at the open up market place.

Delight don't confuse shares outstanding with authorized stock and issued stock every bit they are completely different, and shares outstanding is a subset of both authorized stock and issued stock.

The formula for shares outstanding is quite straight and simple and it can be derived by deducting the number of treasury stock from the number of issued stock of the company. Mathematically, it is represented as,

Shares Outstanding = Issued Stock – Treasury Stock

The full number of issued and treasury stock includes both common and preferred stock available in the company balance sheet.

Examples of Shares Outstanding Formula (With Excel Template)

Permit's accept an instance to understand the calculation of Shares Outstanding in a improve manner.

You can download this Shares Outstanding Formula Excel Template here – Shares Outstanding Formula Excel Template

Shares Outstanding Formula – Example #i

Let us consider an example of a company named KLX Inc. in order to illustrate the computation of shares outstanding. Co-ordinate to the balance sheet for the yr 2018, the company has v.0 million authorized common stock and 1.0 million authorized preferred stock, out of which information technology has issued 3.5 million common stock and 0.7 one thousand thousand preferred stock. During 2018, the company repurchased 0.3 one thousand thousand mutual stocks and 0.one 1000000 preferred stocks. Based on the given data, Calculate the number of shares outstanding of the company.

Solution:

Issued Stock is calculated using the formula given beneath

Issued Stock = Issued Common Stock + Issued Preferred Stock

Issued Stock = 3.v million + 0.7 million
Issued Stock = 4.ii million

Treasury Stock is calculated using the formula given below

Treasury Stock = Treasury Common Stock + Treasury Preferred Stock

Treasury Stock = 0.iii 1000000 + 0.1 million
Treasury Stock = 0.four million

Shares Outstanding is calculated using the formula given beneath

Shares Outstanding = Issued Stock – Treasury Stock

Shares Outstanding = 4.2 million – 0.iv million
Shares Outstanding = 3.viii 1000000

Therefore, the full number of shares outstanding for KLX Inc. at the terminate of the year 2018 is 3.8 million.

Shares Outstanding Formula – Case #2

Permit us have the instance of Walmart Inc.'south financial for the year 2016. The opening number of issued mutual stock for the twelvemonth was three,228 one thousand thousand, while the company repurchased 66 million stock during the year. Based on the given information, Summate the number of shares outstanding of Walmart Inc. at the end of the yr 2016.

Solution:

Shares Outstanding is calculated using the formula given below

Shares Outstanding = Issued Stock – Treasury Stock

Shares Outstanding = three,228 million – 66 million
Shares Outstanding = 3,162 1000000

Therefore, the full number of shares outstanding of Walmart Inc. at the end of the year 2016 is 3,162 meg.

Source Link: Walmart Residuum Sail

Shares Outstanding Formula – Case #three

Allow usa take the example of Apple Inc.' to explain slightly unlike kinds of calculations. During 2016, the company repurchased 279.61 million common stock and issued fresh 37.02 meg common stock. Calculate the number of shares outstanding of Apple Inc. at the finish of the yr 2016 if the opening number of issued common stock for the year was 5,578.75 million.

Solution:

Issued Stock is calculated using the formula given below

Issued Stock = Issued Opening Common Stock + Issued New Common Stock

Issued Stock = 5,578.75 million + 37.02 million
Issued Stock = five,615.77 million

Shares Outstanding is calculated using the formula given beneath

Shares Outstanding = Issued Stock – Treasury Stock

Shares Outstanding = 5,615.77 million – 279.61 million
Shares Outstanding = 5,336.16 million

Therefore, the total number of shares outstanding of Apple Inc. at the stop of the year 2016 is 5,336.16 million.

SourceLink: Apple tree Inc. Balance Sheet

Explanation

The formula for shares outstanding tin be derived past using the post-obit steps:

Step 1: Firstly, annotation from the remainder sheet the number of common stock and preferred stock issued by the company. They are provided as a separate line item nether equity upper-case letter.

Issued Stock = Issued Common Stock + Issued Preferred Stock

Step 2: Side by side, note the number of shares purchased back past the visitor over the period of time. They are known as treasury stock are as well reported equally separate line items under disinterestedness capital.

Treasury Stock = Treasury Common Stock + Treasury Preferred Stock

Step 3: Finally, the formula for shares outstanding can be derived by deducting the number of treasury stock (footstep ii) from the number of issued stock (step 1) as shown below.

Shares Outstanding = Issued Stock – Treasury Stock

Relevance and Use of Shares Outstanding Formula

From the point of view of an investor, information technology is essential to understand the concept of shares outstanding as it is primarily used in the calculation of market capitalization, earnings per share (EPS), cash flow per share, etc.

The number of shares outstanding increases with the outcome of new shares and stock split, while information technology decreases with share re-buy and reverses dissever.