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Treasury Stock on the Balance Sheet

good afternoon everyone this is

Christian with perfect ocular comm a

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refer a friend today we'll be looking at

the definition of Treasury stock as we

do in each one of these fundamental

analysis tutorial videos I'll give you

the actual definition and wanna give you

a little more insight how it's actually

used what it might actually mean to

investors the Treasury stock is a

portion of a company's shares which the

company keeps in their own Treasury

Treasury stock may have come from a

stock buyback from shareholders or it

may have even never been issued to up in

first place

Treasury stock does not pay dividends or

have voting rights Treasury stock is not

included in shares outstanding or any

calculation using shares outstanding for

this example we'll be looking at the

balance sheet for Walmart stores

incorporated you can find the Treasury

stock on the balance sheet as you know

chose your stock is a type of equity so

we're gonna go down to the third section

of the balance sheet under the

stockholders equity break out the tools

right quit okay yeah stockholders equity

that's broken up in different types here

you can see the Treasury stock here is

listed as one of the items and in this

particular case you'll see that there's

nothing here on Walmart's actual balance

sheet that means for this in a moment in

time this snapshot is what about she is

the moment in time so for this moment in

time Walmart does not have any shares in

their Treasury as stock however we know

from we've talked about before on the

common stock section here you can see

that they had three hundred fifty two

million and there's 342 so we know that

they were buying back their shares so

why is there no Treasury stock in the

Treasury stock item here on the line

item and the reason for that is that

they are actually killing those shares

they're putting those shares to death

basically and that's what you want to

see if you're an investor if the company

were to buy back shares and let those

shares to sit in the Treasury stock

position it would help investors in the

fact that it would in those those shares

wouldn't be receiving dividends and so

that you know basically strengthens the

current shares still remaining

outstanding but they could then later on

and reissue those shares because they're

still held by the company and Treasury

when they are actually done away with

they're no longer in the Treasury stock

actually gone will not be reissued ever

ever again so that's what you'd want to

see that's a perfect scenario so they've

actually the company has bought back the

shares and they're not just sitting in a

Treasury stock if in the case you would

looking at a balance sheet you were to

see there were some stock in the

Treasury stock that could be from the

initial public offering and she's still

holding those shares that have never

wore issued or they had bought back

those shares from the open market and

they're just holding on to them and they

had the option of doing that for an

indefinite period of time or they could

then resell them and try to trade on

them so to speak that they bought them

at one price and sell them in another

and so they'll some investors or

management may do it for a company so

now you know please take a moment to

review our disclaimer the information

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under no circumstances do any statements

here represent a recommendation to buy

or sell securities or make any kind of

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the information here will lead to a

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videos are for educational purposes only