How we screen US stocks for Sharia compliance
Every company is screened automatically against published financial ratios, and unclear cases are reviewed by hand. We show every ratio and number so you can check for yourself.
What is this page?
- We screen each company against the criteria for Sharia-compliant shares, following the AAOIFI standard.
- Two steps: the business (conventional banks, alcohol, gambling and the like are excluded), then financial ratios measuring debt, interest-bearing deposits and interest income against the company's size.
- A company that goes over any limit in the table below does not pass. Unclear cases are reviewed by hand.
- The result is helpful information, not a fatwa. You may consult a Sharia authority you trust.
Financial ratios and limits
| Interest-bearing debt / market cap | Below 30% |
|---|---|
| Cash and interest-bearing securities / market cap | Below 30% |
| Receivables / market cap | Below 49% |
| Interest income / revenue | Below 5% |
Market cap basis: 12-month average closing price × shares outstanding in the latest filing.
Business activity screen
Conventional banks and insurers, alcohol, tobacco, gambling and prohibited entertainment are excluded; mixed activities are reviewed by hand.
What the results mean
- Passes the screens
- Does not pass the screens
- Under review
- Not rated
Limitations
- Non-interest impermissible income is not reported separately in filings; it is handled by review.
- Foreign filers (IFRS) report in local currencies, so their ratios are approximate.
Reference standard: AAOIFI Shari'ah Standard No. 21 (financial papers) · Method version: v2
Information, not a religious ruling