The capitalization of SMEs in Morocco: The case of Dari Couspate

Abstract

The SMEs in Morocco neglect their external financing sources. Equity investments in Morocco is accounted to 38% whereas the long-term liabilities debt is 16% and short-term debt is 13%. The importance of equity is affected by the short-term debt. Cash management is one of the greatest failures of Moroccan enterprises. In this report, we try to study in brief, the financial structure of one of the few SMEs listed on the Casablanca stock exchange: Dari Couspate.

Company Dari Couspate was established on December 6th, 1994 by a group of shareholders and one of the most active CEO's Mr. Khalil. Its main activities in Morocco and abroad include the production and marketing of pasta, couscous and other foods made with semolina flour or durum wheat. Its uniqueness is that it is one of seven SMEs listed on the Casablanca stock exchange.

The financial market provides listed companies a source of funding to finance investments. The number of listed companies has increased in recent years in Morocco.This increase in IPOs is explained by the emergence of the Moroccan stock market, which recorded a significant market capitalization in recent years.The market capitalization increased from Dhs 115.5 billion in 2003 to 586,300,000,000 Dhs in 2007. With the volume of transactions that represent the degree of market liquidity, the company recorded in its turn, a remarkable evolution.

Recognizing the benefits of the stock market, Dari Couspate joined the Casablanca Stock Exchange to benefit from the strengths of the association and to develop the potential of the company. Our goal is to analyze the financial structure of this company.

This company has some financial autonomy. Equity is greater than half of all debts that it has in long, medium and short terms. In terms of liquidity, the company has no problems. It can pay its current liabilities by liquidating its current assets and there is even a surplus because we notice that even its relative liquidity is much greater than 100%.