Issued vs Outstanding Shares

The key difference between issued vs outstanding shares is that Issue shares is the total shares that are issued by the company to raise the funds. Whereas, outstanding shares are the shares available with the shareholders at the given point of time after excluding the shares which are bought back.

Difference Between Issued vs. Outstanding Shares

You are free to use this image on your website, templates etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Issued vs Outstanding Shares (wallstreetmojo.com)

The Outstanding shares are less than or equal to Issued shares. These cannot be more than issued shares but can be equivalent to it 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., they will be held as treasury stock by the Company. 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

Issued vs. Outstanding Shares Infographics

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

You are free to use this image on your website, templates etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Issued vs Outstanding Shares (wallstreetmojo.com)

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 financial performance of the Company 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 of it is to determine 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 shares vs. outstanding shares are financial terms that relate to the capital structure of the Company. 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 the help in finding 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 shares 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 comparison table. You may also have a look at the following articles –

Reader Interactions

Comments

  1. AvatarBala Prasad says

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

Leave a Reply

Your email address will not be published. Required fields are marked *