Difference Between Shares Outstanding vs Float

The outstanding shares comprise float stock and restricted stock. Outstanding shares refer to the shares (issued stocks) held by shareholders, company management, and investors in the public domain (Retail and Institutional investors). However, stocks outstanding do not include treasury stock. The term “float stock” refers to a company’s shares that have been issued to the public and those are available for investors to trade in the stock market. Stock data, including the number of authorized shares and something called “float,” reflects the market’s sentiment about the company.

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Share Outstanding (Issued stock)

Outstanding shares are recorded on a company’s balance sheet under the head of “Capital Stock.” The number of outstanding shares is used in calculating key metrics such as a company’s market capitalization, as well as its earnings per share (EPS) and cash flow per share (CFPS).

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Float Stock

Float Stock means that the number of shares available to buy and sell for the investors. It doesn’t count shares owned by company management and internals.

The float is derived by taking a company’s outstanding shares (total shares) and subtracting from it any restricted stock (stock that is under sales restriction). Float stock is important for investors because it indicates how many shares are actually available for general investing public trading. The float value can change from year to year if the company decides to repurchase shares from the market or sell more of its authorized shares internally instead of publicly.

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Float Stock Formula

Float stock  = Outstanding Shares – Restricted Shares

Example: A company may have 6,000 outstanding shares and 1,000 restricted shares with its management and another internal body, then:

• Float stock : Shares outstanding – restricted shares = 6,000 – 1,000 = 5,000

• This is the number available number of stock for trading.

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