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Investopedia offers an overview of how a Comparable Company Analysis (CCA) works based on peer comparisons and estimated discounted cash flow. This article states, "With limited transparency and the difficulty in predicting what the future will bring to any firm, private company valuation is still considered more art than science."
Estimated value based on company's net profit (or loss), owner/manager salary, depreciation & debt, owner's expenses & perks, plus its business category and years of operation. Provided by Fast Business Valuations.
How does one place a valuation on a private company? The author, David F. Lamb, offers scenarios and advice based on the different reasons a valuation is needed. Making a comparison or adding up the book value are the primary methods.