How to Calculate Weighted Averages and Shares Outstanding in Accounting
- 1). Review the general journal for the period to see if any stock has been issued or repurchased by the company. Look for any changes to the "stock" account. The description of the transaction will describe how many shares were either bought or sold.
- 2). Find out the total number of shares outstanding for each time that there was a change in the number. You can do this by finding the number of shares outstanding under the "capital stock" section of the balance sheet for the corresponding point in time. Alternatively, you can find the number of shares outstanding from the beginning of the period and add or subtract the number issued or repurchased as listed in the general journal.
- 3). Add up the number of shares outstanding for each change in the number. For example, if the number of shares issued began at 20,000 and increased to 30,000 but then decreased to 25,000, you would add all three figures to get 75,000.
- 4). Divide the sum by the number of entries to get the weighted average shares outstanding. Continuing the example, if you added the three figures to get 75,000, you would divide it by three to get weighted average shares outstanding of 25,000.