Average basic shares outstanding

Average basic shares outstanding represents the weighted average number of common shares outstanding over a period of time, used by the company for Basic earnings per share calculation. The weighted average basic shares outstanding is calculated by taking the total number of common shares outstanding and multiplying it by the percentage of the reporting period for which that number applies for each period. Simply put, the formula takes the number of shares outstanding during a period till the next change weighted by the duration of time that those shares were outstanding. For multiple-issue companies, the economic value of each share class is normalized relative to the primary issue.

Given that price is permanently changing, average basic shares outstanding helps investors to evaluate the weighted average share price in the portfolio.