Issued vs. Outstanding Shares: What’s the Difference?

Issued vs. Outstanding Shares

Issued shares are the total number of shares a company has ever sold and distributed to shareholders. Outstanding shares represent the number of issued shares currently held by shareholders, excluding any shares the company has repurchased and holds as treasury stock.

In other words, issued shares include both outstanding shares and treasury shares held or bought back by the company. Outstanding shares are those shares in circulation for trading and are equal to issued shares less treasury shares. 

What Are Issued Shares?

Issued shares are the total number of shares a company has created and sold to investors. This figure includes shares held by both outside investors and the company itself as treasury stock. You can find the number of issued shares for a company in the shareholders’ equity section of its balance sheet.

When a company is incorporated, it decides how many shares it’s legally allowed to issue, called authorized shares. The company may choose to issue some or all of these shares to raise money for operations, acquisitions, or growth initiatives.

For example, if a company has 1 million authorized shares but issues only 800,000, the remaining 200,000 shares remain unissued. Those shares could be issued later to raise additional capital or reward employees through stock options.

Issued shares, therefore, represent all shares that have ever been sold or distributed, even if some are no longer in public circulation.

Why issued shares matter:

• They define the total equity capital that the company has raised from shareholders.
• They form the upper limit for the number of outstanding shares.
• They can change over time if the company issues new shares or retires old ones.

What Are Outstanding Shares?

Outstanding shares are the shares currently held by all shareholders, including individuals, institutions, and company insiders. This figure excludes treasury stock, which represents shares the company has repurchased and holds on its own balance sheet. Publicly traded companies disclose current outstanding shares on the covers of their 10-K filings. 

Outstanding shares are used in financial analysis to calculate earnings per share (EPS) and market capitalization, as shown in the formulas for both metrics:

• EPS = Net Income ÷ Outstanding Shares
• Market Capitalization = Share Price × Outstanding Shares

How to Calculate Outstanding Shares

Suppose a company has issued 800,000 shares and later buys back 100,000 shares. The number of outstanding shares would be:

Outstanding Shares = 800,000 – 100,000 = 700,000 shares 

Investors and analysts would use 700,000 outstanding shares when calculating this company’s EPS and market capitalization.

Why outstanding shares matter:

• They reflect actual ownership and voting power among investors.
• They determine per-share metrics that influence stock price and investor decisions.
• They fluctuate when companies issue new shares or buy back existing ones.

Outstanding shares give a snapshot of ownership distribution and are a key input in financial modeling and investment analysis.

Key Differences Between Issued and Outstanding Shares

The main difference between issued and outstanding shares lies in how many are still held by investors (outstanding shares) versus how many shares a company created and sold or awarded at some point (issued shares).

The following table provides a simple side-by-side comparison. 

Issued vs. Outstanding Shares Comparison Table

All outstanding shares are issued shares, but not all issued shares are outstanding. The difference lies in whether the company has repurchased any of its shares and kept them as treasury stock.

The Bottom Line

Issued shares represent all the equity a company has made available, while outstanding shares are the number of shares currently owned by shareholders. This distinction matters because outstanding shares are used to calculate key metrics like EPS and market capitalization. Understanding which number to use ensures accurate valuation analysis and helps you track how corporate actions, such as buybacks, affect shareholder value.

FAQs: Issued vs. Outstanding Shares

What’s the difference between authorized shares and issued shares?

Authorized shares are the maximum number of shares a company can legally issue, as stated in its corporate charter. Issued shares are the portion of authorized shares that have actually been sold or granted to investors.

Why do companies issue shares?

Companies issue shares to raise capital without taking on debt. The funds can support expansion, acquisitions, or product development. Issuing shares also helps attract investors and align employee incentives through stock-based compensation.

How do share buybacks affect issued and outstanding shares?

Share buybacks, or share repurchases, reduce the number of outstanding shares but don’t change issued shares. When a company repurchases its own stock, those shares become treasury stock and are no longer counted as outstanding, even though they remain part of the issued total.

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Additional Resources

Authorized Shares

Earnings Per Share (EPS)

Financial Statement Analysis

See all Accounting resources