How to Calculate Shares Outstanding From a Balance Sheet

Corporations often sell stock to help increase revenue. Investors purchase the stock and thus become part owners of the company. As the company's worth increases, each share of stock value also increases, and the investor can make money by reselling the stock. The number of shares of stock sold, minus the shares the company buys itself--which are called treasury shares--comprise the shares outstanding. Accountants use the shares outstanding to help calculate the earnings per share on financial statements.

Find the figure for earnings per share on the balance sheet. All companies that publicly trade stock must list this figure on the balance sheet. Write down the earnings per share.

Look on the income sheet to find the business' net income. Write down this figure as well.

 

Use the formula "Earnings per share equals net income divided by shares outstanding" to calculate the shares outstanding. Divide the net income by the earnings per share to determine the number of shares outstanding.

 

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About the Author

Jack Ori has been a writer since 2009. He has worked with clients in the legal, financial and nonprofit industries, as well as contributed self-help articles to various publications.