Understanding the Number of Shares Outstanding for US Stocks

When investing in US stocks, it is important to understand the number of shares outstanding. This information provides insights into the company's size, trading volume, and overall capitalization. This article will explain how to find the exact number of shares outstanding and discuss the relationship between the number of shares and other key financial metrics like market capitalization.

Where to Find the Shares Outstanding

The number of shares outstanding is commonly found in various financial documents and reports. For the majority of cases, this number is listed on the quarterly and annual balance sheets. Additionally, public companies are required to report this number in their Form 10-K filings, which is a comprehensive annual report that includes detailed financial information.

Example: Apple Inc. (AAPL)

To illustrate, consider the technology giant, Apple Inc. (AAPL). In the company's annual financial filings, the exact number of shares outstanding is clearly stated. For instance, in the 2017 10-K report, it was disclosed that:

5134312000 shares of common stock were issued and outstanding as of October 20, 2017.

This information is also available directly from the company's website and financial data providers like Bloomberg, which offer comprehensive financial platforms and tools for investors.

Calculating the Number of Shares

While the number of shares outstanding is often disclosed, it is also important to know how to calculate it yourself in case the exact number is not available. The most straightforward way to determine the number of shares is by using the market capitalization and the current share price.

The formula for calculating the number of shares outstanding is:

Number of Shares Outstanding Market Capitalization / Share Price

Example: Apple Inc. (AAPL) Calculation

Let's take a look at a recent example using Apple Inc. as our subject:

Market Capitalization: $854.2 billion Share Price: $168.34

To find the number of shares outstanding, use the formula:

Number of Shares Outstanding $854,200,000,000 / $168.34 ≈ 5,067,670,816 shares

This calculation shows that Apple had approximately 5.07 billion shares outstanding at the time.

Market Capitalization and Shares Outstanding

The relationship between the number of shares outstanding and market capitalization is crucial for understanding a company's valuation. Market capitalization is the total value of all the shares outstanding, calculated by multiplying the current share price by the number of shares outstanding.

Key Points:

Market capitalization Shares Outstanding × Share Price Shares Outstanding Market Capitalization / Share Price

Using these formulas, investors can easily estimate the market capitalization or the number of shares outstanding if they have the necessary financial data.

Conclusion

Understanding the number of shares outstanding is essential for every investor in the US stock market. While it is often directly stated in financial reports and filings, investors can also calculate it themselves using the market capitalization and share price. This information provides a clear picture of the company's size and asset base, making it a valuable tool in investment decision-making.

Key Terms:

US stocks Shares outstanding Market capitalization