Which method cannot be used to value private companies?

Market Value or Market Capitalization is not a viable method for valuing private companies due to the absence of publicly traded shares. Market value is derived from the stock price of a publicly traded company multiplied by the total number of outstanding shares, which inherently requires a stock price that is not available for private firms.

Private companies do not have their equity traded on public exchanges, making it impossible to determine their market value in the same manner as public companies. In contrast, other valuation methods such as Comparable Companies Analysis, DCF Analysis, and Precedent Transactions can be utilized effectively for private firms. Comparable Companies Analysis involves assessing the valuations of similar companies, while DCF Analysis projects future cash flows to derive value. Precedent Transactions looks at previous M&A activity involving similar firms, providing a context for valuation that is applicable to private entities as well.