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KKR Financial Holdings LLC (NYSE:KFN)
Shiller P/E Ratio
1,154.00 (As of Today)

As of today, KKR Financial Holdings LLC's current share price is \$11.54. KKR Financial Holdings LLC's E10 for the quarter that ended in Dec. 2013 was \$0.01. KKR Financial Holdings LLC's Shiller P/E Ratio for today is 1,154.00.

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.

KKR Financial Holdings LLC's adjusted earnings per share data for the three months ended in Dec. 2013 was \$0.304. Add all the adjusted EPS for the past 10 years together and divide 10 will get our E10, which is \$0.01 for the trailing ten years ended in Dec. 2013.

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.

KKR Financial Holdings LLC's Shiller P/E Ratio for today is calculated as

 Shiller P/E Ratio = Share Price / E10 = 11.54 / 0.01 = 1,154.00

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

KKR Financial Holdings LLC's E10 for the fiscal year that ended in Dec13 is calculated as:

For example, KKR Financial Holdings LLC's adjusted earnings per share data for the three months ended in Dec. 2013 was:

 Adj_EPS = Earnigns per Share / CPI of Dec. 2013 (Change) * Current CPI (Dec. 2013) = 0.304 / 233.049 * 233.049 = 0.304

Current CPI (Dec. 2013) = 233.049.

KKR Financial Holdings LLC 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.

KKR Financial Holdings LLC Annual Data

 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 ShillerPE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,178.10 2,381.25 992.76

KKR Financial Holdings LLC Quarterly Data

 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 ShillerPE 1,178.10 617.77 1,463.03 337.90 2,381.25 0.00 0.00 177.84 992.76 158.74
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