Advanced English Dialogue for Business – Issued and outstanding

Listen to a Business English Dialogue About Issued and outstanding

Isabella: Hi Timothy, do you know what “issued and outstanding” means in finance?

Timothy: Yes, Isabella, I do. “Issued and outstanding” refers to the total number of shares of a company’s stock that have been issued and are currently held by investors.

Isabella: That’s right. Can you explain why knowing the number of issued and outstanding shares is important?

Timothy: Certainly, Isabella. It’s important because it affects metrics such as earnings per share and market capitalization, which investors use to evaluate the value and performance of a company.

Isabella: I see. How do companies determine the number of issued and outstanding shares?

Timothy: Companies determine the number of issued shares when they initially sell shares to investors through offerings, and the number of outstanding shares is the issued shares minus any treasury shares or shares repurchased by the company.

Isabella: That makes sense. Are there any factors that can affect the number of outstanding shares?

Timothy: Yes, factors such as stock splits, stock dividends, and share buybacks can all impact the number of outstanding shares, as they involve changes to the company’s capital structure.

Isabella: I understand. How do investors use information about issued and outstanding shares in their investment decisions?

Timothy: Investors may use this information to analyze the ownership structure of a company, assess its market liquidity, and gauge the dilution or concentration of ownership among existing shareholders.

Isabella: Thanks for explaining, Timothy. Understanding the concept of “issued and outstanding” shares seems essential for investors evaluating companies.

Timothy: Absolutely, Isabella. It’s a fundamental aspect of stock market analysis that can provide valuable insights into a company’s financial health and performance.