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AAOIFI Shariah Standard 21 financial ratios diagram showing 30% debt threshold, cash ratio, and impure revenue limits for halal stock screening

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 — 2025)

  1. Open Yahoo Finance → Statistics.
  2. Note Total Debt = $112 B and Market Cap = $2.8 T.
  3. Divide: 112 B ÷ 2 800 B = 0.04 → 4 %.
RatioAppleThresholdPass?
Debt / MC4 %< 30 %✅
Cash + Interest / MC15 %< 30 %✅
Impure Revenue1.9 %< 5 %✅

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