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CareFusion Corp (NYSE:CFN)
Shiller P/E Ratio
37.21 (As of Today)

As of today, CareFusion Corp's current share price is \$59.91. CareFusion Corp's E10 for the quarter that ended in Dec. 2014 was \$1.61. CareFusion Corp's Shiller P/E Ratio for today is 37.21.

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.

CareFusion Corp's adjusted earnings per share data for the three months ended in Dec. 2014 was \$0.830. Add all the adjusted EPS for the past 10 years together and divide 10 will get our E10, which is \$1.61 for the trailing ten years ended in Dec. 2014.

Definition

For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, the Shiller P/E is also called PE10.

The Shiller P/E was first used by professor Robert Shiller to measure the valuation of the overall market. The same calculation is applied here to individual companies.

CareFusion Corp's Shiller P/E Ratio for today is calculated as

 Shiller P/E Ratio = Share Price / E10 = 59.91 / 1.61 = 37.21

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

CareFusion Corp's E10 for the fiscal year that ended in Jun14 is calculated as:

For example, CareFusion Corp's adjusted earnings per share data for the three months ended in Dec. 2014 was:

 Adj_EPS = Earnigns per Share / CPI of Dec. 2014 (Change) * Current CPI (Dec. 2014) = 0.83 / 234.812 * 234.812 = 0.830

Current CPI (Dec. 2014) = 234.812.

CareFusion Corp does not have a history long enough to calculate E10. Therefore GuruFocus does not calculate it.

Explanation

Compared with the regular P/E ratio, which works poorly for cyclical businesses, the Shiller P/E smoothed out the fluctuations of profit margins during business cycles. Therefore it is more accurate in reflecting the valuation of the company.

If a company has consistent business performance, the Shiller P/E should give similar results to regular P/E.

Compared with the P/S ratio, the Shiller P/E makes the comparison between different industries more meaningful.

Be Aware

The Shiller P/E assumes that over the long term, businesses and profitability revert to their means. If a companys business model does not work in the future compared with the past, the Shiller P/E and P/S ratio will give false valuations.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

CareFusion Corp Annual Data

 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 ShillerPE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 26.29

CareFusion Corp Quarterly Data

 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 ShillerPE 0.00 0.00 0.00 0.00 0.00 24.91 24.71 26.29 27.33 36.89
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