How to Calculate the Ownership of Shares

Information that allows the calculation of ownership is available.

Stock has two main categories: common stock and preferred stock. Owners of common stock have control over the organization, voting on such matters as board of directors and major corporate decisions. Typically, owners of preferred stock have no voting rights and therefore no control of the company. Control of a company is typically determined as a percentage of ownership: the higher percentage owned, the greater the control.

Instructions

1. Find the company's financial statements. The best places to find a company's financial statements are either EDGAR or the investor section of the company's website. The form number for a company's financial statement on EDGAR is 10-K.

2. Determine the amount of common stock outstanding. This is located on the balance sheet under the firm's stockholders' equity. For example, firm A has 500,000 shares of common stock outstanding.

3. Determine the amount of stock the investor or firm owns. For example, Investor B owns 150,000 shares of Firm A's common stock.

4. Divide the number of shares an investor or firm owns by the number of shares outstanding. In the example, 150,000 shares divided by 500,000 shares equals 30 percent ownership of Firm A by Investor B.

References

• Investopedia: Common Stock
• Investopedia: Board of Directors
• Investopedia: Common Shareholder
• Investopedia: Preferred Stock

Resources

• SEC: EDGAR