Issued vs Outstanding Shares

Updated on April 26, 2024
Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

The key difference between issued vs. outstanding shares is that Issue shares are the total shares that the company issues to raise funds. At the same time, outstanding shares are the shares available with the shareholders at the given time after excluding the shares bought back.

Difference Between Issued vs. Outstanding Shares

Issued vs Outstanding Shares

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The Outstanding shares are less than or equal to Issued shares. These cannot be more than issued shares but can be equivalent to them if there is no treasury stock.

Outstanding shares = Issued shares – Treasury stock

Example of Issued and Outstanding Share

Let us consider an example to understand it better. Company XYZ Inc. has 50,000 issued shares. It buys back 2,000 shares and does not retire them, i.e., the Company will hold them as treasury stock. What is the number of outstanding shares?

As we know, outstanding shares are issued shares minus the treasury stock i.e.

  • Outstanding shares = Issued shares – Treasury stock
  • Thus, outstanding shares = 50000 – 2000 = 48,000
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Issued vs. Outstanding Shares Infographics

Here we provide you with the top 6 differences between Issued vs. Outstanding Shares.

Issued vs. Outstanding Shares Infographics

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Issued vs. Outstanding Shares– Key Differences

The critical differences between Issued vs. Outstanding Shares are as follows –

Issued vs. Outstanding Shares Head to Head Difference

Let’s now look at the head-to-head difference between Issued vs. Outstanding Shares.

BasisIssued SharesOutstanding Shares
DefinitionInvestors and shareholders of the Company hold these shares. They also include the shares held by the Company in the treasury after it buys back its shares.It is a share issued minus the shares held in the treasury. These are the actual number of shares that the investors hold.
Key differenceIssued Share includes the treasury stock.It does not include treasury stock.
ReportingThe Financial statements don’t report these shares.Financial statements report these shares.
Financial performanceIt does not give a complete picture of the company’s financial performance while measuring key ratios on a per-share basis.They are mainly used to measure the performance of the Company and find key ratios on a per-share basis.
Voting powerIt includes treasury stock, which does not have voting power.Another use is to determine the total shares available for voting and the percentage of shareholding and voting rights of each shareholder.
QuantityThey are more than or equal to outstanding shares.Outstanding shares are less than or equal to issued shares. They can be equal to issued shares only if the treasury stock is zero.

Conclusion

Issued vs. outstanding shares are financial terms related to the company’s capital structure. We have seen the difference between the two terms. While issued shares include the treasury stock with the Company, outstanding shares are of more importance to the financial analysts. Outstanding shares provide the number of voting rights in the Company and help find the key financial ratios of the CompanyKey Financial Ratios Of The CompanyFinancial ratios are indications of a company's financial performance. There are several forms of financial ratios that indicate the company's results, financial risks, and operational efficiency, such as the liquidity ratio, asset turnover ratio, operating profitability ratios, business risk ratios, financial risk ratio, stability ratios, and so on.read more.

All public listed Companies have to adhere to listing requirements. Hence, they will disclose the number of issued and outstanding shares on their website and to stock exchanges.

This article has been a guide to the Issued vs. Outstanding Shares. Here we discuss the top differences between Issued vs. Outstanding Shares along with infographics and a comparison table. You may also have a look at the following articles –

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Comments

  1. Vaishnavi says

    Thank you so much. It is insightful!

  2. Bala Prasad says

    I really happy to see the best informoation provided by you,Thank you

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