How to Calculate Outstanding Shares of Stock

by AlysonNolan; Updated September 26, 2017
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Outstanding shares are shares held by investors. Shares such as treasury stock do not count since treasury stock is owned by the company itself. Accountants, analysts, investors and managers use outstanding shares for financial analyses such as earnings per share and diluted earnings per share calculations. These are important when comparing two different companies to create a relative value.

Step 1

Determine the par value of the share. The par value of the share is listed under stockholders' equity on the balance sheet. For example, Ricky Rat Corporation has a par value of $4 per common share.

Step 2

Determine the value of the listed share on the balance sheet. This is a number listed under each year. Determine the year you want to calculate and look at the corresponding line underneath the year on the balance sheet. For example, Ricky Rat Corporation's common share is listed as $20,000 on their balance sheet.

Step 3

Divide the listed share's value by the par value of the share to find the number of shares outstanding. For example divide $20,000/$4 = 5,000 shares.

Photo Credits

  • balance sheet image by Darko Draskovic from Fotolia.com