How do you calculate number of shares outstanding?
Number of shares outstanding can be calculated by taking the total number of shares issued by the company and subtracting any treasury stock (repurchased shares that have not been retired). The formula to calculate shares outstanding is:
Shares Outstanding = Total shares issued - Treasury stock
Total shares issued is the total number of shares that have been issued by the company, including any common stock, preferred stock, and any other classes of stock that the company may have issued.
Treasury stock refers to shares that have been repurchased by the company but have not been retired. These shares are held by the company and are not considered to be outstanding shares because they do not have voting rights and do not receive dividends.
By subtracting treasury stock from the total shares issued, you can calculate the number of shares outstanding, which represents the total number of shares that are currently owned by investors and are actively traded on the stock market.