The equity method is a tool in accounting that allows a company to record its share of profits earned by investments in other companies. It is used when a company has a 20%-50% in the second company.
For example, assume Company ABC owns 25% of the equity of Company XYZ. If Company XYZ posts a net income of $1 million, then Company ABC records investment income of $250,000 on its own income statement.
Bet you've never seen portfolio analytics like these.