Mizan
Trust centre · Methodology

How Mizan screens stocks

Every threshold in Mizan traces back to a public, primary source — the original standard, the scholar's own publication, or the index methodology. No black-box scores.

How the engine works

Sector first, then financial ratios

Every stock goes through two screens, in order. If the sector screen fails, the verdict is Not halal and the financial ratios are not applied — a company that earns its money from a prohibited activity cannot be rescued by a clean balance sheet.

  1. Sector exclusion. Alcohol production / sale, gambling, tobacco, conventional banking / insurance / interest-based lending, weapons and defence (most profiles), pork products, adult entertainment, non-halal food processing. Each profile chooses which of these to apply.
  2. Financial ratio screen. Between three and five ratio checks depending on the scholar:
    • Impermissible income / revenue.
    • Interest-bearing debt / market cap.
    • Cash + interest-bearing securities / market cap.
    • Accounts receivable / market cap (DJIM only).
    • Illiquid (tangible) assets / total assets — Mufti Taqi specifically.
Per-scholar references

The six profiles and the sources behind them

AAOIFI Standard

AAOIFI

Default Gulf standard, used by most Islamic banks. Strict on impermissible income, moderate on debt.

Thresholds
Impermissible income / revenue
≤ 5%
Interest-bearing debt / market cap
≤ 30%
Cash + securities / market cap
≤ 30%
Purification scope
dividends only
Primary sources

Mufti Taqi Usmani (stricter Hanafi)

Mufti Taqi

AAOIFI standards PLUS illiquid assets must be at least 20% of total, AND capital gains must be purified, not just dividends.

Thresholds
Impermissible income / revenue
≤ 5%
Interest-bearing debt / market cap
≤ 30%
Cash + securities / market cap
≤ 30%
Illiquid assets / total assets
≥ 20%
Purification scope
dividends + capital gains
Primary sources

Dow Jones Islamic Market

DJIM

Most permissive of the major indices. One-third (33%) caps on debt, cash, and receivables.

Thresholds
Impermissible income / revenue
≤ 5%
Interest-bearing debt / market cap
≤ 33%
Cash + securities / market cap
≤ 33%
Receivables / market cap
≤ 33%
Purification scope
dividends only
Primary sources

Ja'fari (Sistani-aligned)

Ja'fari

Shia methodology. Sector exclusions per Ayatollah Sistani's rulings; khums (20%) applies to net annual surplus, treated as capital-gains purification.

Thresholds
Impermissible income / revenue
≤ 5%
Interest-bearing debt / market cap
≤ 33%
Cash + securities / market cap
≤ 33%
Purification scope
dividends + capital gains
Primary sources

Strict / zero-tolerance

Strict

Minority view: any riba exposure is impermissible. No threshold tolerance on debt, interest income, or cash holdings. Almost no public equities pass.

Thresholds
Impermissible income / revenue
≤ 0%
Interest-bearing debt / market cap
≤ 0%
Cash + securities / market cap
≤ 0%
Purification scope
dividends + capital gains
Primary sources

Custom (your thresholds)

Custom

Set your own thresholds. Defaults shown match AAOIFI; adjust to match your scholar's view.

Thresholds
Impermissible income / revenue
≤ 5%
Interest-bearing debt / market cap
≤ 30%
Cash + securities / market cap
≤ 30%
Purification scope
dividends only
Primary sources
  • Standard
    Your scholar of taqlid

    The custom profile is yours to configure. Mizan defaults to AAOIFI thresholds; edit them at /custom to match the scholar you follow.

Worked example

Why scholars disagree on AMZN

Amazon's interest-bearing debt (≈6.5% of market cap) sits well below AAOIFI's 30% cap and DJIM's 33% cap, and its impermissible income (≈2.8% of revenue) is under every scholar's threshold. Under AAOIFI and DJIM, AMZN is Halal.

Mufti Taqi Usmani adds the illiquid-asset floor: tangible assets must exceed 20% of total assets. Amazon's ratio is ≈12% — overwhelmingly intangible (brand, code, AWS goodwill). Under his published standard, AMZN does not represent ownership of enough real assets to be tradable, and the verdict flips to Not halal.

No standard is "more correct." The disagreement is real, published, and held by hundreds of millions of Muslims. Mizan's job is to surface it.

See AMZN under all six scholars
Where the data comes from

Financial fundamentals

Financial fundamentals are sourced from Financial Modeling Prep in Year 1 and graduate to Refinitiv / SIX Financial as international coverage expands. Mizan computes the Shariah ratios in-house from balance-sheet primitives — we do not rely on any third party's pre-computed "halal score".

Stock fundamentals refresh nightly. When a company files a 10-K, 10-Q, or equivalent, we re-screen every affected position within four hours and notify Pro-tier users whose portfolio verdicts change.

Current prototype screens a 163-ticker representative sample. FMP live-data integration is wired in; production coverage scales to any listed equity as the daily enrichment script runs.

Oversight

Shariah Supervisory Board — not yet

Mizan does not yet have a Shariah Supervisory Board. Until one is seated, credibility comes entirely from the primary-source citations on this page — every threshold in the engine traces back to a public document you can verify. That citation chain is intentionally the credibility floor.

When a board is engaged, the plan is: quarterly methodology review, audited sample of AI Q&A outputs, and an annual public Shariah report co-signed by named scholars. We will not publish any name before written engagement is in place — claims of supervision without documentation are common in this industry and we refuse to participate.

Disagreements & corrections

We welcome challenge

If you believe a scholar profile in Mizan misrepresents the underlying scholarship, write to methodology@mizaninvesting.com with the citation. Every note is reviewed against the cited primary source and a public changelog entry is added if a profile changes.

Last updated 22 May 2026. Back to home.