## Common Stock Defintion

Common stocks are the number of shares of a company and are found in the balance sheet. Common Stockholders are the company’s owners; they have voting rights and also earn dividends. They can either be company promoters, insiders or outside investors.

### Common Stock Formula

The common stock formula is represented as follows,

Common Stock (Outstanding Shares) = Number of Issued Shares – Treasury Stocks

For eg:
Source: Common Stock (wallstreetmojo.com)

• Outstanding shares – Oustanding shares are the number of shares available to the company owners who hold a portion of the business. These holders can be company insiders or outside shareholders.
• Treasury Shares – Treasury Shares the shares bought back by the company.
• Issued Shares – Issued shares are the total number of shares issued by the company out of the overall pool of authorized shares.

### Examples of Common Stock

Let’s see some simple to advanced examples of the Common Stock calculation to understand it better.

You can download this Common Stock Formula Excel Template here – Common Stock Formula Excel Template

#### Example #1

Let us take an arbitrary example of a company A to find out how to calculate the number of outstanding shares of the company. Now we will also try to understand what authorized shares, issued shares, and treasury stocks mean. Suppose the number of authorized shares for a company is 5000 shares.

Suppose the treasury stock portion is 500 shares. Authorized share is the maximum number of shares a common can issue which is mandated during the public offering of a company.

The snapshot below represents all the data required for common stock formula calculation.

Calculation of outstanding shares will be as follows,

Number of outstanding shares= 2000-500= 1500.

Therefore, the number of outstanding shares will be –

A number of outstanding shares = 1500.

A company cannot issue shares more than the authorized number of shares, but it can issue less than the number of authorized shares. So suppose the company has issued 2000 shares during a public offering. So, in this case, the number of shares issued is equal to the outstanding shares of the company. Companies sometimes , which part of their corporate strategy. If the company buys back its shares, then that portion of the share is with the company, and the owners of the equity do not own that share.

#### Example #2

Let us look at the common of a company from its quarterly filing. The company AK Steel is a US stock of the steel industry. Below is the snapshot of the shareholder’s equity section for the company AK Steel. The company clearly reports in its quarterly filling the information for its common stocks.

The information includes the number of authorized shares, which the maximum amount of shares the company can issue.

The snapshot below represents all the data required for common stock formula calculation.

Therefore, the calculation of the number of outstanding shares will be as follows,

Number of outstanding shares= 316,569,578 – 1,059,088

The number of outstanding shares will be –

Number of outstanding shares =315,510,490

The number of authorized shares for AK Steel is 450,000,000 shares. The company issued a lesser number of shares than it is authorized to issue, which is 316,569,578 shares. The number of treasury shares for the company, which is the number of shares bought back by the company and is no longer part of outstanding shares and also do not receive any dividend is 1,059,088.

#### Example #3

Let us look at the common of a company from its quarterly filing. The company United Steel is a US stock of the steel industry.

Below is the snapshot of the shareholder’s equity section for the company AK Steel. The company clearly reports in its quarterly filling the information for its common stocks.

The snapshot below represents all the data required for common stock formula calculation.

Therefore, the calculation of the number of outstanding shares will be as follows,

Number of outstanding shares= 177,354,654 – 96,399

The number of outstanding shares will be –

Number of outstanding shares = 177,258,255

The information includes the number of authorized shares, which the maximum amount of shares the company can issue. The number of authorized shares for AK Steel is 300,200,000 shares. The company issued a lesser number of shares than it is authorized to issue, which is 177,354,654 shares.

The number of treasury shares for the company, which is the number of shares repurchased by the company and is no longer part of outstanding shares and also do not receive any dividend is 96,399.

### Recommended Articles

This has been a guide to Common Stock Formula. Here we discuss how to calculate Common Stock (number of outstanding shares) with the practical examples and downloadable excel sheet. You can learn more about accounting from the following articles –

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