Shark Tank!

I have been watching the Shark Tank (http://en.wikipedia.org/wiki/Shark_Tank_(TV_series) and am continually amazed what people believe their companies are worth. One example was a company that does $200k in revenue with $75k in profit (I assume that the "Sharks" have access to the real financials of the deal because there is so many ways to cut this such as is the owners salary in there, cost of goods, advertising and such? What is the EBITA (http://en.wikipedia.org/wiki/EBITA))

Anyway the above example was wanting $350k for 15% of their company. If you calculate that out they value their company at over $2million. However they have only sold $200k (TOTAL). Even the best valuation (If that revenue was recurring) would be $1million and that would be extremely (Extremely) high.

I understand that people have high emotions tied to companies they start. However, reality is I would sell a business selling $200k with $75k in margin (if that is real) for over $2 million IN A HEARTBEAT.