Series 79: Treasury Stock

Treasury Stock

The amount of a company’s treasury stock is the amount of its own stock the company has repurchased. The reacquisition of stock reduces the amount of shares outstanding in the open market, although the shares are still considered issued. Treasury stock has no voting rights and is not entitled to the payment of a dividend. It is usually shown as a negative number on the balance sheet.

When one is analyzing a company, treasury stock should not be treated as common stock for calculating share-based ratios such as earnings per share.

When treasury stock is withdrawn from publicly circulated stock, the amount of stock remaining in circulation is the number of shares outstanding. As