investing guide

Calculating Outstanding Shares

outstanding shares

So how do you go about calculating outstanding shares?

When a company issues shares of stock, that are made available through a stock exchange, the total number of shares issued is called the company's outstanding shares.

Since the stock market runs on the principle of supply and demand; corporations need to be careful as to how many shares of stock they issue. Corporations want to be sure that investors will buy most of the shares issued.

The outstanding shares include both the shares issued to the public as well as corporate insiders. The company's board of directors will determine how many shares it issues; as well as how many shares will be used within the company.

You can find the outstanding shares for any company on most financial websites. To understand why the number of outstanding shares is important you have to understand the term float.