Treasury stock is stock that a company has issued to investors and subsequently repurchased from them. A company may buy treasury stock multiple times and pay a different price per share each time. A company typically tries to buy shares at the lowest price, and reports the total number of shares it has repurchased and the total cost for which it repurchased them in the “Stockholders’ Equity” section of its balance sheet. You can use this information to calculate the average price a company paid for its treasury stock.
Find a company’s most recent balance sheet in either its 10-Q quarterly reports or in its 10-K annual reports. You can obtain these reports online in the investor relations section of a company’s website, or from the U.S. Securities and Exchange Commission’s online EDGAR database.
Find the line item called “Less: Treasury Stock” in the “Stockholders’ Equity” section of the balance sheet.
Identify the number of shares and dollar amount of treasury stock on the treasury stock line item. The balance sheet shows the dollar amount of treasury stock enclosed in parentheses to designate that the amount reduces stockholders’ equity. In this example, assume the company’s balance sheet shows 100,000 shares of treasury stock at a total cost of $1 million.
Divide the treasury stock’s total cost by the number of shares to calculate the average price the company paid for its treasury stock. Continuing the example, divide $1 million by 100,000 to get a $10 average price per share of treasury stock.
