Accountant Needed!Please help me to understand annual report (shares problem)!!Thank you?

Question

So, what is authorized shares?issued shares and shares outstanding?

for example, 10000 authorized shares, 1000 shares are issued, and 100 shares are outstanding, how many shares does the public hold and the owners hold??

Please teach me how to identify the amount of shares the owners, the public have?(in percentage)

http://moneycentral.msn.com/investor/sec/filing.asp?Symbol=SMWF

please use this as an example!

Thank you soooooooo much!

Answer 1

I am not an accountant, but I think I can answer your question.

"Shares authorized is the maximum number of shares that a company can issue. This number is specified in the company's articles of association but can be changed by shareholder approval. A company usually authorizes a higher number of shares than required to be able to issue stock in the future."

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Shares outstanding are common shares that have been authorized, issued, and purchased by investors. They have voting rights and represent ownership in the corporation by the person or institution that holds the shares. They should be distinguished from treasury shares, which are common stock repurchased by the corporation. Treasury shares decrease outstanding shares.

Shares outstanding can be calculated as either basic or fully diluted, with the effect of such diluting securities as options or convertibles. Shares outstanding can be obtained from quarterly filings with the SEC.

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A treasury stock or reacquired stock is stock which is bought back by the issuing company, reducing the amount of outstanding stock on the open market ("open market" including insiders' holdings).

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Basic formulae:

Shares authorized = Shares issued + Shares unissued

Shares issued = Shares outstanding + Treasury stock

Looking at the last quarterly report for SMWF as of March 31, 2008 there were

10,990,000,000 common shares authorized

19,690,963 common shares issued and outstanding

both of which are much larger numbers than the corresponding numbers from June 30, 2007. That probably means that the company is raising additional money by selling more shares, but you would need to check to be sure. The number of shares issued can also increase due to employee stock options or stock splits.