Legal Definitions - shares outstanding

Shares outstanding refer to the total number of shares of a company's stock that are currently owned by investors and have not been repurchased by the company. This number is important because it is used to calculate important financial ratios like earnings per share and market capitalization.

For example, if a company has issued 1 million shares of stock and 100,000 of those shares have been repurchased by the company, then the number of shares outstanding is 900,000.

Knowing the number of shares outstanding can help investors understand the value of their investment in a company. If a company has a high number of shares outstanding, it may be more difficult for the stock price to increase because there are more shares to be bought and sold. On the other hand, if a company has a low number of shares outstanding, it may be easier for the stock price to increase because there are fewer shares available.