Shares outstanding

Shares outstanding are like toy blocks. When a company is created, it has a certain number of toy blocks to play with. These toy blocks are called shares. Imagine the company has 100 toy blocks, which means there are 100 shares outstanding.

Now, let's say someone wants to buy a few toy blocks from the company. They can do this by buying shares. When they buy 10 shares, the company will give them 10 toy blocks in exchange. But, the number of shares outstanding will remain the same, which means there are still 100 toy blocks in total.

On the other hand, if someone sells their toy blocks (shares), they will give them back to the company. This means the number of toy blocks in the hands of the public, or shares outstanding, will decrease.

Shares outstanding are important because they help investors and analysts understand how much of a company is owned by the public, and how much is still owned by the company itself. This can help them make decisions about whether to invest in the company or not. It's like counting how many toy blocks you have left to build your tower, and how many have already been used by others.