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 that a company issues. Its shareholders and investors hold these shares. The company issues these to the people in the Company or the general public and some large investment institutions.
- Outstanding sharesOutstanding SharesOutstanding shares are the stocks available with the company's shareholders at a given point of time after excluding the shares that the entity had repurchased. It is shown as a part of the owner's equity in the liability side of the company's balance sheet. are Issued shares minus the stock in the 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. We use the number of outstanding shares for calculating various financial ratios, like the Earnings per share (EPS).
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
Issued vs. Outstanding Shares– Key Differences
The critical 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 repurchased by the Company. Thus, subtracting treasury shares from the issued shares will give outstanding shares.
- Issued shares include shares held in treasuryShares Held In TreasuryTreasury Stock is a stock repurchased by the issuance Company from its current shareholders that remains non-retired. Moreover, it is not considered while calculating the Company’s Earnings Per Share or dividends. . A Company can use these for future sale or purchase some other business. In contrast, outstanding shares do not include treasury stock.
- The financial statementsFinancial StatementsFinancial statements are written reports prepared by a company's management to present the company's financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels. don’t report Issued shares. In comparison, Financial statements don’t report outstanding shares.
- Outstanding shares help in determining the voting power in the Company for each shareholder and also the total number of voting shares.
- The Outstanding Shares are useful to know the financial performance of the Company per share. E.g., to calculate earnings per share EPSEPSEarnings Per Share (EPS) is a key financial metric that investors use to assess a company's performance and profitability before investing. It is calculated by dividing total earnings or total net income by the total number of outstanding shares. The higher the earnings per share (EPS), the more profitable the company is., the earning 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 the latter case, 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||Investors 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 difference||Issued Share includes the treasury stock.||It does not include treasury stock.|
|Reporting||The Financial statements don’t report these shares.||Financial statements report these shares.|
|Financial performance||It 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 power||It 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.|
|Quantity||They 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.|
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..
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 –