How we identify Halal stocks?
Ethical threshold
Strictly, no unethical and socially harmful industry:
- Weapons
- Narcotics
- Vulgar entertainment
- Etc
Debt threshold
Experts suggests, a company's stock can be identified as Halal when the ratio of company's debt vs company's value is below 33%
Halal stocks are naturally safe because of debt limits
Interest threshold
Considering the ubiquitous interest based financial system, experts suggest a company's stock can be identified as Halal when the ratio of it's interest income vs total income is below 5%
Liquidity threshold
Experts suggest that a company can be identified as Halal if the ratio of cash to total assets of the company is less than 33%
The ideally permissible limit of interest money involvement in Halal businesses is 0%
While there is no 100% perfect approach of identifying ethical or Halal stocks, we rely on the expert advice!
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