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About CIBP™ Exam

  • CIBP™ Exam Coverage

    The CIBP™ exam focuses on assessing the examinee’s comprehension and proficiency in essential concepts, processes, techniques, and methodologies used in Investment Banking analysis and decision-making roles. Delving beyond foundational finance and accounting, the CIBP™ exam places emphasis on the mechanics and analytics specific to Investment Banking. While examinees are exposed to fundamental business principles, as well as rudimentary accounting and finance, the primary objective is a deep and accelerated grasp of Investment Banking concepts.

    The exam encompasses questions spanning a wide range of Investment Banking areas. These questions are drawn from a body of knowledge that defines the crucial understanding required for aspiring Investment Bankers. Detailed coverage and structure of the exam can be found in the IBCA Handbook of Investment Banking, provided to all CIBP™ candidates. The following knowledge areas and topics are specifically evaluated in the exam:

    Knowledge Areas & Topics

    • PART A: Valuation and Comparable Companies Analysis


      • Studying and Identifying Key Characteristics for Comparison; Screening for Comparable Companies; Selecting Key Companies for Comparison
      • Locating Essential Financial Information; Utilizing SEC Filings: 10-K, 10-Q, 8-K, Proxy Statements; Leveraging Sell-Side Equity Research, Press Releases, News Sources; Summarizing Financial Data from Primary Sources
      • Analyzing Key Statistics, Debt and Interest Coverage Ratios, and Trading Multiples
      • Benchmarking Comparable Companies; Comparing Financial Ratios and Statistics; Evaluating Trading Multiples Over Time and Benchmarking Against the Index
      • Determining Valuation of Target Company using Various Methods (EV/EBITDA or EV/EBIT P/E); Selecting Most Appropriate Valuation Method after Weighing Pros and Cons in the Context
    • PART B: Precedent Transactions Analysis


      • Understanding the Universe of Comparable Acquisitions; Rigorous Screening of potential targets for Comparable Acquisitions and Comprehensive Evaluation of Additional Considerations
      • Navigating Deal-Related and Financial Information; Compilation of potential Public Targets and Private Targets
      • Unveiling Key Statistics, Ratios, and Transaction Multiples; Calculation of Crucial Financial Metrics and Ratios, including Accurate Calculation of Essential Transaction Multiples
      • Establishing a Benchmark for Comparable Acquisitions; Precision in Valuation Determination and Detailed Exploration of Key Advantages and Disadvantages
      • Evaluating Comparable Transactions’ Estimated Revenue and Cost Synergies vs Realized Synergies
    • PART C: Discounted Cash Flow Analysis


      • In-depth Study of the Target and Identification of Core Performance Drivers
      • Projection Considerations for Free Cash Flow; Accurate Projection of Sales, EBITDA, and EBIT; Precision in Free Cash Flow Projection
      • Rigorous Calculation of Weighted Average Cost of Capital, encompassing Target Capital Structure Determination, Estimated Cost of Debt (rd), and Estimated Cost of Equity (re)
      • Terminal Value Calculation via Exit Multiple Method and Gordon Growth Method
      • Prudent Calculation of Present Value for the acquisition; Precise Valuation Determination for the target; Thorough Execution of Sensitivity Analysis
    • PART D: Leveraged Buyouts - Mechanism & Market


      • Comprehensive Understanding of Key Stakeholders, including Financial Sponsors, Investment Banks, Bank and Institutional Lenders, and Bond Investors
      • LBO Target Management: Analyzing Characteristics of a Viable LBO Candidate; Rigorous Assessment of Cash Flow Generation, Market Positions, Growth Prospects, Efficiency Enhancement Potential, Capital Expenditure Requirements, Asset Base, and Management Team Proficiency
      • Economics of LBOs: Returns Analysis through Internal Rate of Return; Returns Assessment via Cash Return; Insight into how LBOs Generate Returns and the Role of Leverage in Enhancing Returns
      • Core Strategies for Exit/Monetization: Business Sale; Initial Public Offering; Dividend Recapitalization; Below Par Debt Repurchase
      • LBO Financing: Structural Components; Primary Sources including Bank Debt, High-Yield Bonds, Mezzanine Debt, and Equity Contribution
      • LBO Financing: In-depth Analysis of Key Terms such as Security, Seniority, Maturity, Coupon, Call Protection, and Covenants
    • PART E: LBO Analysis for Decision-Making


      • Proficiently Accessing and Analyzing Information for Optimal Financing Structure and Valuation Determination
      • Creation of the Pre-LBO Model via Historical and Projected Financial and Cash Flow Statements
      • Detailed Crafting of Deal Transaction Structure, encompassing Purchase Price Assumptions, Financing Structure Details, and Finance Source Identification
      • Thorough Completion of the Post-LBO Model through the Construction of the Debt Schedule, Finalization of Pro Forma Income Statement from EBIT to Net Income, Pro Forma Balance Sheet, and Pro Forma Cash Flow Statement
    • PART F: Sell-Side Mergers & Acquisitions


      • Deconstructing Auction Mechanism; Insight into Auction Structures
      • Strategic Organization and Preparation for Sell-Side M&A Deals: Aligning with Seller Objectives; Formulating Appropriate Sale Processes; Conducting Sell-Side Advisor Due Diligence; Preliminary Valuation Analysis; Strategically Selecting Buyer Pool; Crafting Effective Marketing Materials; Implementing Confidentiality Agreements
      • Initial Round of M&A Activities: Engaging Potential Buyers; Negotiating and Executing Confidentiality Agreements; Distributing Comprehensive Confidential Information Memorandum and Initial Bid Procedures Letter; Formulating Effective Management Presentations; Establishing Data Room; Facilitating Stapled Financing Package; Vet initial Bids and Identifying Candidates for Second Round; Distinguishing Valuation Approaches - Strategic Buyers vs. Financial Sponsors
      • Subsequent Round of M&A Activities: Facilitating Management Presentations; Coordinating Site Visits; Providing Data Room Access; Dispensing Final Bid Procedures Letter; Drafting Definitive Agreement; Finalizing Bids from Buyers
      • Scrutinizing Final Bids; Effective Negotiations with Preferred Buyer(s); Discerning the Winning Bidder; Issuance of Fairness Opinion; Board Approval and Definitive Agreement Execution
      • Culmination of the deal by Securing Requisite Shareholder Approvals; Financing and Effectuating the Negotiated Sale
    • PART G: Buy-Side Mergers & Acquisitions


      • Buyer Motivation and Synergy Analysis; Assessing Cost and Revenue Synergies; Exploring Acquisition Strategies - Horizontal Integration, Vertical Integration, Conglomeration
      • Comprehensive Overview of Financing Forms: Cash on Hand, Debt Financing, Equity Financing; Discerning between Debt and Equity Financing from the Acquirer Perspective
      • Insightful Deal Structuring: Stock Sale, Asset Sale; Unpacking Stock Sales Treated as Asset Sales for Taxation Purposes
      • Methodical Buy-Side Valuation; Analyzing Football Field at Various Prices; Conduction Contribution Analysis; In-depth Merger Consequences Analysis; Incorporating Purchase Price Assumptions; Evaluating Balance Sheet Implications; Undertaking Accretion/Dilution Analysis; Exploring Various Acquisition Scenarios (e.g., 50% Stock / 50% Cash; 100% Cash; 100% Stock)
      • Initial Round of M&A Activities (continued): Initiating Contact with Potential Sellers; Negotiating and Executing Confidentiality Agreements; Distributing Comprehensive Confidential Information Memorandum and Initial Bid Procedures Letter; Creating Management Presentations; Establishing Data Rooms; Facilitating Stapled Financing Package; Reviewing Initial Bids and Identifying Sellers to Proceed to Second Round; Differentiating Valuation Approaches - Strategic Sellers vs. Financial Sponsors
      • Subsequent Round of M&A Activities (continued): Conducting Comprehensive Management Presentations; Arranging Site Visits; Facilitating Data Room Access; Dispensing Final Bid Procedures Letter; Drafting Definitive Agreements; Finalizing Bids from Sellers; Comprehensive Evaluation of Seller Proposals
      • Evaluation of Final Bids; Effective Negotiations with Preferred Sellers; Selecting the Winning Bidder; Rendering Fairness Opinions; Securing Board Approval and Executing Definitive Agreements
      • Successful Closure of the Deal: Obtaining Mandatory Approvals from Shareholders; Securing Financing and Concluding the Negotiated Acquisition
      • The CIBP™ examination comprehensively evaluates a candidate's grasp of the intricate facets of Investment Banking across these vital knowledge areas, enabling a thorough understanding of the practices and principles that underlie successful investment strategies and decision-making processes.
  • CIBP™ Exam Structure

    Understanding the fundamental layout of the CIBP™ exam is crucial prior to attempting or preparing for it. The exam typically comprises 50 multiple-choice questions, categorized into fact-based and numeric or argument-based queries.

    Fact-based Questions

    Fact-based questions are designed to assess the examinee's ability to accurately recall concepts, principles, techniques, and established practices in contemporary investment banking. Answers to these questions reflect the awareness and grasp of critical concepts covered in the IBCA body of knowledge.

    Numeric or Argument-based Questions

    Numeric or argument-based questions gauge the examinee’s comprehension of concepts, principles, and techniques at an advanced level. These questions evaluate the ability to apply understanding and knowledge to real-world scenarios.

    Scoring Pattern

    Each fact-based or numeric/argument-based question has a single correct answer. Examinees are scored if they select the correct option.

    Please Note:
    • Examinees are allotted 90 minutes to complete the exam.
    • Certain exams may include only fact-based or numeric/argument-based questions.
    • The number of questions may change without prior notice.
  • The Objectives and Principles Underlying the Exam Design

    The exam's objective is to validate the examinee’s potential to effectively execute a range of tasks across diverse investment banking sub-domains. Through assessing knowledge of investment banking theory and practice, the exam system evaluates the application of this knowledge to achieve excellence. These exams adhere to the standards of the Standardized Knowledge Architecture for Practice Excellence. The IBCA Body of Knowledge is engineered to redefine the landscape of investment banking in the 21st century.

    CIBP™ Exams assess the examinee’s familiarity with contemporary principles, theories, analysis techniques, approaches, methods, and practices. These exams expect candidates to engage with the material in the IBCA Investment Banking Handbook and remain current with the evolving theories and practices by exploring journals, books, and expert podcasts.

  • Qualifying the Exam

    A cumulative score of 65%-70% usually qualifies for the exam. However, individual scores don't solely determine award recommendations. A sophisticated algorithm considers factors like geographic and environmental influences, nullifying skewed performance impacts. Hence, the pass/fail benchmark is subject to variations.

  • Preparing for the CIBP™ Exam

    The CIBP™ exam aims to affirm candidates' potential to perform effectively across various sub-domains within the Investment Banking sector. It's crucial for IBCA to evaluate and affirm candidates' capabilities before awarding the CIBP™ Charter.

    CIBP™ examinees must broaden their perspective on Investment Banking. Aspiring professionals in the Investment Banking realm should dedicate extra effort. While the CIBP™ Resource Box provides study resources, additional research is advised for thorough exam preparation. Investment banking is an evolving discipline that may never be an exact science. Attempting to grasp such subjects through a single book or a set of books limits a holistic understanding of their dimensions.

    As the leading credentialing body in Investment Banking, IBCA shoulders the responsibility of covering contemporary Investment Banking in its entirety, including related aspects. IBCA affirms evaluating each individual across areas impacting or harboring the potential for professional capabilities in Investment Banking.

    CIBP™ transforms charterholders' professional competencies. While IBCA encourages the use of the IBCA Handbook on Investment Banking for exam preparation, it is just one piece of the preparation puzzle. For additional resources and modes to enhance Investment Banking understanding and exam readiness, refer to the IBCA Exam Guide, downloadable from your myIBCA dashboard. Although many CIBP™ exam questions are drawn from the Handbook's content, some may arise from external sources. All exam topics are covered in the Handbook, providing a robust foundational understanding. While learning resources include books and guidelines, thorough research is essential for optimal exam readiness.

    Therefore, IBCA strongly advises CIBP™ examinees to explore online and offline resources for expanded knowledge of Investment Banking's impact on diverse industries. This knowledge aligns with global expectations for successful navigation.

    To ensure CIBP™ candidates evolve into dynamic, top-tier international professionals, IBCA encourages extensive reading from diverse sources.