10 Key Numbers to Know About Challenger Technologies Limited

Challenger Technologies Limited (SGX: 573) should be a familiar name among consumers.

Challenger Technologies is an IT products retailer of personal computers, notebooks, printers, tablets and mobile devices. There is much more we can learn about the retailer from its 2016 annual report. From it, I picked out 10 numbers that investors should know:

1. Challenger Technologies was listed 13 years ago in 2004. At the end of 2016, the IT retailer had about 40 stores islandwide. It also has over 500,000 Valueclub members, which is an impressive number.

2. In 2016, Challenger Technologies launched, an online marketplace to complement its network of physical stores. It expects to roll out options for same-day delivery and store pickup. For the first quarter of 2017, Challenger Technologies said that online sales made up 10% of its sales.

3. Challenger Technologies also opened its 14,000 square foot flagship store in the basement of Bugis Junction in May 2017. The new store comes after it had to shut down its previous flagship store at Funan DigitaLife Mall, which was torn down for redevelopment.

4. As an investor, there are a few metrics we might want to watch for a retailer like Challenger Technologies. For instance, we might want to know its inventory turnover, which is the time needed to sell its inventory on hand. A lower figure is desirable. Challenger Technologies recorded an inventory turnover of 51 days for 2016. In 2012, the turnover was 37 days.

5. Another measure worth knowing is the trade receivable turnover, that is the average time the retailer takes to collect cash from its customers. For Challenger Technologies, the trade receivable turnover is six days.

6. The IT retailer also provides two other financial metrics, the current ratio and the quick ratio.

7. The former takes a firm’s current assets and divides it by the firm’s current liabilities. It provides a rough measure of a firm’s liquidity. A ratio above 1.5 times, in general, would be desirable. Challenger Technologies scores a healthy 3.04 for its current ratio for 2016.

8. Meanwhile, the quick ratio is similar to the current ratio, except that the quick ratio removes inventory from the current assets as part of the calculation. Most investors would prefer a quick ratio of above one time. For 2016, Challenger Technologies had a quick ratio of 1.91 times.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Chin Hui Leong doesn't own shares in any company mentioned.