What It Is:
Shares outstanding refers to all shares currently owned by stockholders, company officials, and investors in the public domain, but does not include shares repurchased by a company.
How It Works/Example:
Shares that are outstanding include stock owned by the firm's shareholders and owners. Shares outstanding does not include treasury stock, which are stock shares that are repurchased by the company. It also does not include unissued shares.
The number of shares outstanding is listed on a company's balance sheet as "Capital Stock" and is reported on the company's quarterly filings with the US Securities and Exchange Commission. The number of shares outstanding can also be found in the capital section of a company's annual report.
Why It Matters:
Shares Outstanding is included in the market capitalization formula (outstanding shares multiplied by current share price) and earnings per share formula (EPS calculated as outstanding shares divided by earnings), two major measures of a company's value and performance used by investors.