Here we are given a part complete model for Coca-Cola, a company which has a number of equity method investments, including a material stake in monster beverages.

We're going to complete the model by including the appropriate income statement, balance sheet, and cashflow statement entries in respect of these equity method investments.

Let's start by taking a quick look at the information provided in the assumptions we're given an assumption for the growth rate in equity method income, and the dividend payout ratio.

In the calculation section, we have an empty base calculation for equity method investments.

The income statement is almost complete, but is missing the equity method income forecast.

The balance sheet is also nearly complete, but is missing the equity method investments forecasts.

The cashflow statement is also nearly complete, but is missing the cashflow entries for equity method investments.

As a result of all of this, the balance sheet in this model doesn't yet balance, and therefore we're going to need to create the equity method investment entries needed to complete the model and balance the balance sheet.

We're gonna start by forecasting the equity method income in the income statement.

This uses the growth rate assumption provided at the top of the model.

So let's grab this first and then multiply that by the prior year equity method income to give our first year forecast equity method income.

Now that we've calculated the first year, we can copy that to the right to complete our remaining forecasts.

Now that we've calculated the equity method income, we can start to build our base analysis.

We start by taking the ending balance on equity and method investments from the last reported year.

This then becomes our beginning balance in the first forecast year.

We then add the equity method income that we calculated in the income statement for the first forecast year.

Finally, we can take the dividend payout assumption provided at the top of the model and apply this to our equity method income forecast.

We're gonna multiply this by minus one to make it a negative so that it's subtracted in the base calculation.

We can then sum our base calculation to provide the ending balance on our equity method investments in the first forecast year.

Now that we've completed this calculation for the first year, we can copy this to the right for subsequent forecast years.

The next step is to take the ending balance on our base calculation and include this in the balance sheet for equity method investments.

So let's do that now, and now we can copy that over to the right for subsequent years.

The final step is to make the adjustments needed in the cashflow statement.

So let's go to the cashflow statement now.

And the first thing we need to do is to subtract the equity method income from our income statement.

This is a non-cash income item, which is included in net income.

We can then add the dividend received from equity investees because this is an actual cash inflow, and we're gonna grab this from the base calculation, but we need to multiply the dividend received by minus one, so it becomes a positive number in our cashflow statement.

Now that we've completed this, we just copy those over to the right and we've finished our cashflow statement as well.

This now means that our model is complete, and we can check that our model has integrity by confirming that our balance sheet now balances, and when we look up to our check line, we can see that this is the case.