Differences Between Outstanding Shares & a Float

by Will Gish

Outstanding shares and a float pertain directly to the stock issued by any given company. The definitions of outstanding shares and a float prove similar enough to overlap in certain ways, which can lead people to confuse the terms. Despite the similarities between these investment terms, a few important differences helps distinguish one from the other.

Outstanding Shares

Outstanding shares constitute all the shares of a company owned by investors. This includes all restricted, common and preferred shares, but not treasury shares. Preferred and common shares constitute types of stock available to the general public, while restricted shares constitute those given or sold to employees. Treasury shares are shares bought back by the company. Because the company owns these shares, they are not outstanding in anyway, and therefore do not qualify as outstanding shares.


The number and value of a company's outstanding shares figures in a variety of financial calculations. Market capitalization, for instance, equals the price per share multiplied by the number of outstanding shares. This calculation shows the dollar value of all outstanding shares and indicates the overall value of a company. Determining earnings per share (EPS), a measure of the profitability of investing in a company, also requires outstanding shares as an element in equations.

The Float

In investment terminology, the float constitutes all outstanding shares available for trading by the general public. Calculating a company’s float proves a matter of basic mathematics. The formula is: float equals outstanding shares, minus restricted shares. Because restricted shares exist within a company as the property of its employees, the general public cannot purchase these shares. Thus the float, or all shares available to the general public, equals all outstanding shares other than the restricted shares.

Outstanding vs. Float

The primary difference between outstanding shares and a float lies in the fact that a float constitutes one of two elements present in the total number of outstanding shares. The float plus the number of restricted shares equals the total number of outstanding shares. Outstanding shares comprise various types of shares, while the float only includes those shares available for trading. Each company issuing restricted and public shares maintains outstanding shares and a float.

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