Why the 30 % threshold?
AAOIFI’s Shariah Standard No. 21 sets three quantitative screens. The most-quoted is the interest-bearing-debt-to-market-cap ≤ 30 %. Anything above that implies the company relies heavily on riba-based financing.
Step-by-step example (Apple — Q1 2024)
- Open Yahoo Finance → Statistics.
- Note
Total Debt = $112 BandMarket Cap = $2.8 T. - Divide: 112 B ÷ 2 800 B =
0.04→ 4 %.
| Ratio | Apple | Threshold | Pass? |
|---|---|---|---|
| Debt / MC | 4 % | < 30 % | ✅ |
| Cash + Interest / MC | 15 % | < 30 % | ✅ |
| Impure Revenue | 1.9 % | < 5 % | ✅ |
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