Shares Outstanding
What are shares outstanding?
Shares outstanding is a very easy concept to understand. Basically it is the number of stocks that are held by investors. This includes restricted shares owned by company officers and insiders, as well as common shares held by the public. If a company buys back stock, these shares are not considered outstanding.
Why is it important?
This number is very important in calculating many more advanced metrics. For example to find the market cap you have to multiply the price per share by the outstanding shares, and to find the EPS you divide the net income minus dividends by the outstanding shares.
Authorized Shares
This term refers to the maximum number of shares that a corporation can issue. This number is agreed upon when the company is created. It can only be increased or decreased with a shareholder vote.Restricted Shares
Restricted shares are simply ones given to employees and officers, or those restricted to special insiders within the company that are not allowed to be sold on the free market.
Float
The float is simply the opposite of restricted shares. The float is available to the general public to buy, and for most publicly traded companies the float represents the largest percentage of outstanding shares.