Informed Decision-Making Backed by Accurate Financial Insights
In the context of mergers, acquisitions, and strategic investments, financial due diligence is essential for assessing the financial integrity, performance, and risk exposure of a target entity. CityLinkers provides professional financial due diligence services to assist investors and acquiring entities in making well-informed decisions with confidence.
Our experienced due diligence team delivers objective, thorough evaluations of the target company's financial and operational position, thereby identifying key risks and uncovering value-adding insights.
In the context of mergers, acquisitions, and strategic investments, financial due diligence is essential for assessing the financial integrity, performance, and risk exposure of a target entity. CityLinkers provides professional financial due diligence services to assist investors and acquiring entities in making well-informed decisions with confidence.
Our experienced due diligence team delivers objective, thorough evaluations of the target company's financial and operational position, thereby identifying key risks and uncovering value-adding insights.
Scope of Services
CityLinkers’ financial due diligence services cover all critical aspects necessary for comprehensive transaction evaluation:
Financial Statement Analysis
We perform an in-depth analysis of the target company’s financial statements, including:
- Balance sheet, income statement, and cash flow statement reviews
- Assessment of financial health, profitability, and liquidity
- Identification of historical trends, variances, and financial anomalies
Review of Accounting Records
Our team examines the target’s accounting systems and records to ensure compliance with:
- Hong Kong Financial Reporting Standards (HKFRS)
- Revenue recognition practices, expense classification, and asset/liability valuation accuracy
- Identification of any non-standard or inconsistent accounting treatments
Review of Legal and Tax Matters
We evaluate the company’s legal and tax compliance, with particular attention to:
- Corporate registration documents, shareholder agreements, and regulatory filings
- Status of profits tax, salaries tax, and stamp duty reporting
- Identification of tax exposures, underpaid obligations, or unresolved disputes
Review of Key Agreements
We assess the financial implications of major contractual obligations, including:
- Supplier and customer contracts
- Loan and financing agreements
- Lease arrangements and off-balance sheet items
- Risks associated with long-term commitments
Related Party Transactions
We examine the nature and terms of related-party transactions to ensure:
- Compliance with transfer pricing requirements
- Reasonableness of pricing and commercial substance
- Proper documentation and disclosure of transactions
Site Visits and Asset Verification
Where appropriate, we conduct site visits to:
- Verify the existence and condition of fixed assets
- Review inventory levels and valuation methodologies
- Ensure consistency between operational data and financial reporting
Working Capital Analysis
We analyse working capital to assess operational efficiency and liquidity, focusing on:
- Turnover ratios for receivables, payables, and inventory
- Cash flow reliability and adequacy
- Identification of seasonal or structural working capital constraints
Assessment of Potential Liabilities
We identify financial risks that may not be fully reflected in the financial statements, such as:
- Unrecorded liabilities or obligations
- Contingent liabilities, including legal claims and warranties
- Environmental, regulatory, or compliance-related exposures
Why CityLinkers
CityLinkers offers a professional and structured approach to financial due diligence, supported by:
- Experienced Professionals: Our team comprises senior advisors with Big Four backgrounds and extensive M&A experience across multiple jurisdictions and industries.
- Objective and Independent Assessments: We provide clear, data-driven evaluations to assist clients in pricing decisions and risk mitigation.
- Regional Expertise: With strong capabilities in Hong Kong, Mainland China, and Asia-Pacific markets, we support cross-border and local transactions with precision and efficiency.
- Actionable Reporting: Our due diligence reports are concise, insightful, and tailored to the needs of executive decision-makers and investment committees.
Supporting Informed Investment with Confidence
At CityLinkers, we are committed to delivering our clients comprehensive financial insights throughout the M&A process, ensuring clarity, accuracy and reliability. Our financial due diligence services are designed to enhance transparency, reduce transaction risk, and ensure post-deal success.
Should you require further information or wish to discuss how CityLinkers can support your acquisition or investment project, please do not hesitate to contact us.
