An American depositary receipt (ADR) is a U.S.-traded security representing shares in a non-U.S. company. The ordinary shares are the underlying common ownership shares. One ADR can represent one ordinary share, several shares, or a fraction of a share, so the two counts are not always interchangeable.
Key takeaways
Ordinary shares, often called common shares, represent ownership in a company. Their voting and dividend rights depend on the share class and the company's terms.
An ADR is a receipt issued by a U.S. depositary bank representing shares of a non-U.S. company. It trades in U.S. dollars. An American depositary share (ADS) is the share unit represented by the receipt; market participants often use ADR and ADS interchangeably. These definitions follow the SEC's introduction to ADRs (opens in a new tab).
A second share class is a separate category of a company's shares, such as Class A and Class B. The classes may have different rights and prices. That is a different issue from an ADR representing an existing class. See dual-class shares and market cap for examples of adding distinct classes.
In this guide, the ratio always means ordinary shares per ADR:
Ordinary shares represented = ADR count × ordinary shares per ADR
For a hypothetical program where one ADR represents two ordinary shares:
The second number expresses the full ordinary-share count in ADR units. It does not mean that 500 million receipts have actually been issued or are trading in the U.S.
A ratio can also be fractional. If one ADR represents half an ordinary share, 10 ADRs represent 5 ordinary shares. Check the company's investor-relations page or the depositary bank's program documents for the ratio and which way it is written.
Suppose a hypothetical company has 1 billion ordinary shares outstanding, one class, and an ADR representing 2 ordinary shares. Assume an ADR price of $100 and a matching ordinary-share value of $50 in USD at the same time.
Both calculations describe the same $50 billion equity value:
Ordinary-share basis: $50 × 1 billion shares = $50 billion
ADR-equivalent basis: $100 × 500 million units = $50 billion
Multiplying the $100 ADR price by 1 billion ordinary shares instead gives $100 billion: twice the value because the units do not match.
This is a unit-conversion example, not a claim that two market quotes always line up exactly. If the ordinary-share quote is in another currency, convert it to USD for the USD calculator. Exchange rates and trading times can affect quoted prices.
Open Optional: another class or an ADR in the market cap calculator when you need the extra inputs.
The ADR converter changes a receipt count into ordinary shares. It does not change the share-price field. After using the converted count, enter the matching ordinary-share price in USD.
Use the company's total shares outstanding for company market cap. Converting your own 10 ADRs into 20 ordinary shares describes your holding, not the size of the whole company. Likewise, the number of receipts issued in a U.S. program may cover only part of the company's shares.
For a genuinely separate share class, enter that class's own price and count. Do not enter ADRs as another class alongside the ordinary shares that back them.
The ratio is a conversion factor, not an investment return or a sign that one security is cheaper. It does not measure company quality. ADR programs can also involve depositary fees; the SEC bulletin (opens in a new tab) explains where those terms are disclosed.
For the basic company-size formula, start with what market capitalization means.
For general education only. Nothing here is investment advice.
References explain the concepts; MarketCapLens supplies the examples and calculator assumptions. See who checks the numbers.