| Course | AC466 Fraud Detection and Financial Statement Analysis |
|---|---|
| Unit | Unit 4 |
| Paper type | Ratio benchmark comparison |
| Length | About 560 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Accounting |
| Updated | October 2026 |
Free sample paper for AC466 Unit 4
Ninety Days Against a Peer Median of 58: A Unit 4 Ratio Benchmark Comparison for a Pool Equipment Maker
[Student Name]
Purdue University Global
AC466: Fraud Detection and Financial Statement Analysis
Unit 4 Ratio Benchmark Comparison
[Instructor Name]
[Date]
Tidewell Pool Systems and its peers are composite, and every figure is illustrative; the textbooks and article cited are real.
Choosing the Peers
The peer group is five listed makers of pool, spa and outdoor water equipment. Each was chosen for three features it shares with Tidewell: it sells mainly through independent distributors, its demand peaks in spring and summer, and its products are durable equipment rather than chemicals or service. Two larger diversified manufacturers with pool divisions were excluded, because their consolidated ratios are dominated by industrial and residential water segments with different customers and terms. The median, not the mean, summarizes the group, since one unusual peer among five can pull an average a long way.
The Benchmark Table
Receivable days: Tidewell 60, 71 and 90 for 2023 to 2025; peer median 58, range 49 to 66.
Gross margin: 34.0, 34.7 and 36.0 percent; peer median 31.4, range 28.9 to 33.8. The peer median fell from 32.6 percent in 2023 as input costs rose.
Operating cash flow to net income: 1.58, 0.91 and 0.28 times; peer median 1.10, range 0.94 to 1.31.
Inventory days: 78, 75 and 73; peer median 88, range 71 to 104, so Tidewell sits near the low end.
Current ratio: 2.5, 2.5 and 2.7; peer median 2.4, range 1.9 to 2.9.
Selling and administrative expense: 22.0, 20.0 and 19.0 percent of revenue; peer median 20.5, range 17.8 to 23.1.
Debt to equity: 0.36, 0.33 and 0.30; peer median 0.41, range 0.22 to 0.63.
Asset turnover: 0.82, 0.85 and 0.86; peer median 0.91, range 0.78 to 1.08.
The Three Measures That Diverge
Receivable days. Tidewell began the period in line with peers and ended it 32 days above the median and 24 above the highest peer. Customers in the same channel, buying similar products in the same season, pay the peers in about two months and Tidewell in three. Either Tidewell's terms changed, its customers changed, or its sales were recorded earlier relative to when customers became obliged to pay.
Gross margin. Peers' margins fell as copper, resin and freight costs rose; Tidewell's rose 2.0 points. Price increases cannot explain all of it, since peers raised prices too.
Each divergence alone has an innocent explanation, but receivable days rising, gross margin rising against falling peer margins and cash coverage collapsing are three relationships breaking in the same year in the same direction, toward earnings recorded before cash arrives.
Operating cash flow to net income. Peers convert each dollar of earnings into about $1.10 of operating cash. Tidewell converted $0.28 in 2025. Low cash conversion is among the measures most associated with later restatement in large samples of misstated firms (Dechow et al., 2011).
The Five That Do Not
Inventory days, the current ratio, selling expense, debt to equity and asset turnover all sit within the peer range. That matters: a company in general distress would show strain across many measures, while Tidewell's divergence is concentrated in receivables, margin and cash. Benchmarking against peers chosen for similar economics is what gives the divergences meaning (Subramanyam, 2014; Penman, 2013).
References
Dechow, P. M., Ge, W., Larson, C. R., & Sloan, R. G. (2011). Predicting material accounting misstatements. Contemporary Accounting Research, 28(1), 17-82. https://doi.org/10.1111/j.1911-3846.2010.01041.x
Penman, S. H. (2013). Financial statement analysis and security valuation (5th ed.). McGraw Hill.
Subramanyam, K. R. (2014). Financial statement analysis (11th ed.). McGraw Hill.
Reading the AC 466 Unit 4 instructions
Unit 4 of AC466 asks you to benchmark a company's ratios against an appropriate peer group. Begin by choosing peers and stating the criteria, such as channel, seasonality and product type, and explain any exclusions. Use the median and range rather than an average for a small group. Compute each ratio for the company over several years beside the latest peer median and range. Interpret every measure that diverges: what the gap is, what could explain it innocently and what it would mean otherwise. Also note the measures that fall within the peer range, since a concentrated divergence says something different from general weakness. Look for divergences that point the same way. Penman, Subramanyam and Dechow's research are the sources to cite, in APA 7.
How this AC466 Unit 4 example is built
The sample explains the choice of five distributor-led, seasonal pool and spa equipment makers and the exclusion of two diversified firms, and justifies the median. The benchmark section gives eight measures for three years with the 2025 peer median and range: receivable days of 60, 71 and 90 against 58; gross margin rising to 36.0 percent against a peer median that fell to 31.4; cash coverage falling to 0.28 against 1.10; and inventory days, current ratio, selling expense, debt to equity and asset turnover within range. Interpretations follow for the three divergent measures, and the highlighted sentence explains why three breaks in one direction matter more than any single ratio. Dechow and colleagues support the cash conversion point, and a closing section explains why the five measures within range narrow the questions.
Reading the AC466 Unit 4 grading rubric
AC466 benchmark comparisons are graded on peer selection, correct ratios and the quality of interpretation. Peers should be chosen for economic similarity, with criteria and exclusions stated. The median and range should summarize a small group. Graders look for interpretation of each divergence that includes an innocent explanation and the concern it raises. The strongest work notices when several divergences point in the same direction and when other measures hold steady, since that combination focuses the inquiry. Ratios must be computed consistently across years and peers. Linking divergences to research on misstatement adds credibility. Graders also expect one readable table and correct APA 7 references.
AC466 Unit 4 help from the desk
Many Unit 4 comparisons pick peers by name recognition rather than economics, or include diversified giants whose ratios mean little. Others average five peers and let one outlier distort the benchmark. Divergences are listed without interpretation. Measures within range are ignored, so the reader cannot tell whether the company is generally weak or specifically unusual. Innocent explanations are missing. Ratios are computed on different bases for the company and the peers. If your section supplied a peer list or industry data, our writers can build the benchmark and interpret it from those sources.
Get an AC466 Unit 4 example written to your instructions
Peer sets are handed out in some sections and built from scratch in others; say which, and attach the company's filings, the Unit 4 prompt and the rubric. Ratios are defined once, applied identically to every firm and read against both trend and peers. The first custom comparison carries no fee and lands in 24-48h. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More AC466 papers and BS in Accounting samples
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- AC466 Unit 3: Horizontal Trend Analysis
- AC466 Unit 5: Revenue Recognition Red Flag Review
- AC466 Unit 6: Cash Versus Earnings Analysis
- AC466 Unit 7: Disclosure Note Analysis
- AC466 Unit 8: Seminar Reflection
- AC466 Unit 9: Restatement Case Study
- AC466 Unit 10: Analytical Findings Memo
- AC465 Unit 4: Vendor Red Flag Review
- AC450 Unit 4: Later Period Consolidation
- AC112 Unit 4: Adjusting Entries Set
- AC444 Unit 4: Star Schema Data Model
AC466 Unit 4 questions, answered
How are peer companies chosen for a benchmark?
By how closely their economics match, not by name recognition. The sample uses three criteria, distributor-led selling, seasonal demand and a public listing so filings are available, and it states why two larger firms were left out. A section that assigns peers or an industry data source, such as published ratio studies, takes priority over those criteria.
Why use a peer median instead of an average?
Five companies is a small group, and one unusual peer can drag an average a long way. The median is the middle value and ignores that pull, so it describes a typical competitor more reliably. The sample prints the peer range as well, which shows whether the company sits outside every peer or only past the middle.
Can the comparison use the peers my instructor listed?
Yes. Send the company, the peer list or the industry data your section uses, the prompt and the rubric. Each ratio is defined once and applied to every firm from its own filings, and the pages of interpretation go to whichever measures your company's numbers show breaking from the group.
Where can I find a free AC466 Unit 4 sample paper?
This page holds a complete AC466 Unit 4 ratio benchmark comparison for a composite pool equipment maker against five peers, with peer selection, eight measures, interpretations and APA 7 references.
Why does AC466 Unit 4 report measures that match the peers?
Because they show the divergence is concentrated. Inventory days, liquidity, selling expense, debt and asset turnover sit within the peer range, so the problem lies in receivables, margin and cash, not general distress.