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What are Outstanding Shares?

Outstanding shares are common stock authorized by the company, issued, purchased and held by investors.

How Do Outstanding Shares Work?

Outstanding shares may also be referred to as shares outstanding, or issued shares.

Outstanding shares include stock owned by the public as well as restricted shares owned by the company's officers and employees. The number of outstanding shares 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.

Why Do Outstanding Shares Matter?

Outstanding shares are used in the calculation of market capitalization (outstanding shares multiplied by current share price) and earnings per share (EPS calculated as outstanding shares divided by earnings), two major measures of a company's value and performance used by investors.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.