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
- Issued shares are the shares of the Company that are issued by the Company and held by its shareholders and investors. These are the shares issued by the Company to the people in the Company or the general public and some large investment institutions.
- Outstanding shares are Issued shares minus the stock in treasury. When a Company buys back its shares and does not retire them, they are said to place in the treasury. Thus, after subtracting such shares in the treasury, the remaining are said to be outstanding shares. The number of outstanding shares is used for calculating various financial ratios like the Earnings per share (EPS).
Outstanding shares are less than or equal to Issued shares. Outstanding shares cannot be more than issued shares but can be equal 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. A Company XYZ Inc. has 50,000 issued shares and 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
Issued vs Outstanding Shares– Key Differences
The key differences between Issued vs Outstanding Shares are as follows –
- Issued shares are the total shares issued by the Company whereas outstanding shares are the shares with the shareholders i.e. it does not include the shares bought back by the Company. Thus, subtracting treasury shares from the issued shares will give outstanding shares.
- Issued shares include the shares held in treasury which can be used by the Company for future sale or to purchase some other business whereas outstanding shares do not include treasury stock.
- Issues shares are not reported on financial statements whereas outstanding shares are reported on financial statements.
- Outstanding shares help in determining the voting power in the Company for each shareholder and also the total number of voting shares.
- They are useful to know the financial performance of the Company per share. For eg. to calculate earnings per share EPS, the earnings are divided by outstanding shares and not the issued shares.
- Outstanding shares are less than or equal to issued shares. They are mostly less than the issued shares except for the Companies which do not have treasury stock in case of which the outstanding shares will be equal to the issued shares.
Issued vs Outstanding Shares Head to Head Difference
Let’s now look at the head to head difference between Issued vs Outstanding Shares
|Basis||Issued Shares||Outstanding Shares|
|Definition||These shares are held by the investors and shareholders of the Company. They also include the shares held by the Company in the treasury after it buys back its shares.||It is a share which is issued minus the shares held in treasury. These are the actual number of shares which are held by the investors.|
|Key difference||It includes the treasury stock.||It does not include treasury stock.|
|Reporting||These shares are not reported on financial statements.||The outstanding stock is reported on financial statements.|
|Financial performance||It does not give a complete picture of the financial performance of the Company while measuring key ratios on per share basis.||They are mainly used to measure the performance of the Company and find key ratios on per share basis.|
|Voting power||It includes treasury stock which does not have voting power.||It is used to determine total shares available for voting and the percentage of shareholding and voting rights of each shareholder.|
|Quantity||They are more than or equal to outstanding shares.||They are less than or equal to issued shares. They can be equal to issued shares only if the treasury stock is zero.|
Issued shares vs outstanding shares are financial terms which 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 is 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 Company.
All public listed Companies have to adhere to listing requirements and hence, they will disclose the number of issued shares and outstanding shares on their website and to stock exchanges.
This 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 –