April 5, 2024
Issued Shares VS Outstanding Shares English

Difference Between Issued And Outstanding Shares

The main difference between Issued and Outstanding Shares is that issued shares are the total shares a company has ever issued, including those held by the company itself, while outstanding shares are those currently held by investors, excluding any shares held by the company.

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Issued Shares Meaning

Issued shares represent the total number of shares a company has distributed to shareholders. This includes all shares purchased by investors, plus those held by the company or its insiders. Issued shares reflect the total equity a company has generated from shareholders.

Issued shares are the cumulative number of shares a company has distributed since its inception. These include all shares bought and owned by investors, company executives, and institutional investors. The total issued shares form part of a company’s equity structure.

These shares represent the capital raised by a company through equity financing. They can include both common and preferred stocks. Issued shares play a key role in determining a company’s market capitalization and ownership structure.

For Example: A company initially issues 1,000,000 shares priced at Rs. 10 each. Investors purchase 800,000 shares, while the company retains 200,000. The total issued shares are 1,000,000, even though only 800,000 are in public hands.

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Outstanding Shares Meaning

Outstanding shares refer to the total number of shares of a company that are currently owned and held by all its shareholders, including share blocks held by institutional investors, Held by the public, and restricted shares owned by the company’s officers and insiders.

Outstanding shares constitute the shares actually in the hands of investors, both public and internal, including insiders and institutional holders. They exclude any treasury shares the company has bought back and currently holds. Outstanding shares are what investors commonly refer to when analyzing a company’s market capitalization.

These shares are critical for calculating key financial metrics like earnings per share (EPS) and the price-to-earnings (P/E) ratio. A change in the number of outstanding shares, through actions like stock buybacks or additional issuance, directly affects these metrics and potentially the stock’s value.

For example: If a company issues 1 million shares and later buys back 2,00,000 shares only 800,000 shares remain outstanding. These are the shares held by investors and used to calculate market cap and other financial metrics.

Outstanding Shares Vs Issued Shares

The main difference is that issued shares are the total shares a company has ever distributed, including treasury shares, while outstanding shares are those currently held by all shareholders, excluding shares the company has repurchased and holds in its treasury.

AspectIssued SharesOutstanding Shares
DefinitionTotal number of shares a company has distributed.Shares currently held by investors, excluding treasury shares.
IncludesAll shares ever issued, including treasury shares.Only shares in the hands of public and internal shareholders.
Treasury SharesCounts treasury shares (company-held shares).Excludes treasury shares.
Use in AnalysisReflects the company’s capital raised through share issuance.Used to calculate market capitalization, EPS, P/E ratio.
ChangeChanges with new share issuance or buybacks.Alters with buybacks or issuance, but doesn’t include treasury shares.
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Outstanding Shares Vs Issued Shares –  Quick Summary

  • Issued shares encompass all shares a company has distributed, including those bought by investors and held internally. They represent the company’s total equity obtained from shareholders, reflecting both external and internal ownership.
  • Outstanding shares are the total shares held by all shareholders, including the public, institutional investors, and company insiders. This count excludes treasury shares and represents the currently circulating equity in the market.
  • The main difference is that issued shares include all shares a company has distributed, counting treasury shares, whereas outstanding shares are only those currently held by shareholders, not including the company’s repurchase treasury shares.

Difference Between Issued And Outstanding Shares – FAQs

What Is The Difference Between Shares Issued And Outstanding?

The main difference is that issued shares are the total shares a company has ever issued, while outstanding shares are those held by investors, excluding shares repurchased by the company and held as treasury shares.

What Is The Meaning Of Shares Issued?

Shares issued refer to the total number of shares a company has distributed since its formation. This includes all shares bought by investors and held internally, representing the company’s equity provided to shareholders.

What Is An Example Of Outstanding Shares?

For example, if a company issues 1 million shares and retains 2,00,000 in its treasury, the outstanding shares amount to 8,00,000. These are the shares held by investors and used in market capitalization calculations.

What Is The Formula For Outstanding Shares?

The formula for outstanding shares is: Issued Shares – Treasury Shares. It calculates the total number of shares currently held by all shareholders, including the public and company insiders, but excluding shares held by the company itself.

How Many Shares Are Issued In A Company?

The number of shares issued by a company varies widely and depends on the company’s decisions. It can range from thousands to billions, based on the company’s size, capital needs, and strategic financing choices.

Is Issuing Shares A Liability?

Issuing shares is not a liability, it’s an equity transaction. When a company issues shares, it exchanges ownership stakes for capital. Unlike liabilities, which require repayment, equity represents ownership and doesn’t entail repayment obligations.

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