Free Float Calculator
Table of contents
What is free float shares?How to calculate free float sharesWhy it is important to understand the free float definition?FAQsWe have prepared this free float calculator for you. It calculates the number of free float shares a company has.
After reading this article, you will understand what free float is and how to calculate the free float shares. Furthermore, you will find some practical free float calculation examples to help you understand the concept better.
Why it is important to understand the free float definition?
Now that we have looked at the free float calculation example let's spend some time understanding the implication of the metrics.
The higher the free float percentage, the higher the liquidity of the shares. This means it will be easier for investors to sell and buy the shares if the free float percentage is high. To understand more about liquidity, check out our LCR calculator.
Can free float be negative?
No, the free float cannot be negative. This is because the free float is the number of shares available for the public in trading, and there is no such thing as a negative number of shares.
What are restricted shares?
Restricted shares are unregistered, nontransferable shares issued by the company to its employees. They are not available to the public.
Companies use restricted stares as either employee compensation or incentive. For employees, it creates an interest in the welfare of the company.
How do I calculate free float?
You can calculate the free float in four steps:

Determine the number of shares outstanding.

Determine the number of restricted shares.

Determine the number of closelyheld shares.

Apply the free float formula:
free float = shares outstanding  restricted shares  closelyheld shares
.
How do I calculate free float percentage?
You can calculate the free float percentage in five steps:

Determine the number of shares outstanding.

Determine the number of restricted shares.

Determine the number of closelyheld shares.

Apply the free float formula:
free float = shares outstanding  restricted shares  closelyheld shares
. 
Apply the free float percentage formula:
free float percentage = free float / outstanding shares × 100
.
What is the free float percentage if there are 2,000 free floats and 5,000 shares outstanding?
The free float percentage is 40%
.
You can calculate the free float percentage by dividing 2,000 by 5,000. Next, you multiply the answer by 100.