How We Screen Every Stock for Shariah Compliance

Step one is a business activity check. We look at what the company actually does and how it earns the majority of its revenue. Banks, conventional insurers, breweries, and gambling operators are excluded outright.

Step two is the debt screen. We calculate total interest-bearing debt as a percentage of total assets. AAOIFI guidance sets this threshold at 33%.

Step three is the income screen. We check what percentage of total revenue comes from impermissible sources — interest income on cash holdings, for example. The threshold here is 5%.

Step four is liquidity screening — checking that illiquid assets make up a reasonable share of total assets, so the investment represents real economic activity rather than pure cash or receivables trading.

Every asset that passes all four checks gets a Halal badge. Companies that fail by a small margin get a Doubtful badge with the specific reason shown. Everything is re-reviewed every quarter.