How We Screen Stocks
Every screening result in Mizaan follows a clear, reproducible process. Here's exactly how it works.
Two-Tier Screening
Following AAOIFI Standard No. 21, every stock is evaluated through two independent checks. A stock must pass both to be considered compliant.
1. Business Activity Screen
Is the company's core business permissible? Companies in categorically haram sectors are excluded outright, regardless of financial ratios.
2. Financial Ratio Screen
Are the company's debt, interest income, and cash ratios within acceptable thresholds? Even a permissible business can fail if its financial structure relies too heavily on riba.
Business Activity Screen
The first layer examines the company's sector, industry, and business description. Companies whose primary activity is impermissible are excluded immediately.
Excluded Sectors
Mixed-Revenue Companies
Companies in industries like advertising, entertainment, or hospitality are not automatically excluded. Instead, they are flagged for AI-assisted business analysis, which examines revenue segments, SEC filings, and public disclosures to identify specific concerns. If substantive issues are found (e.g., significant revenue from impermissible activities), the verdict may be escalated from “Compliant” to “Questionable.”
Defence and Weapons
Screening standards differ on defence and weapons. When our data shows defence or weapons revenue, the stock page says so, with an estimated share of revenue and its source where one is available. That note is for your information: Mizaan does not change a verdict on the basis of it. Companies classified as Aerospace & Defense are reviewed like other mixed-revenue companies (above).
AAOIFI
Does not name weapons or defence. It caps income from prohibited activities at 5% of total income (clause 3/4/4).
AAOIFI Shari'ah Standard No. 21, Financial Paper (Shares and Bonds), Issued 20 May 2004 (30 Rabi' I 1425H). Clauses 2/1, 3/4/1 and 3/4/4.
DJIM
Lists the manufacture and supply of weapons and systems deployed for purposes other than defense, including spyware and offensive components and systems. Non-permissible revenue must be below 5% of total business revenue. The May 2025 edition listed weapons and defense more broadly.
Dow Jones Islamic Market Indices Methodology (S&P Dow Jones Indices), September 2026. Appendix A, Shariah Compliance Screens, Sector-Based Screens.
S&P
Does not exclude defence or weapons manufacturing. Its Shariah committee treats weapons as neutral.
S&P Shariah Indices Methodology (S&P Dow Jones Indices), September 2026; FAQ Q6 (2012). Eligibility Criteria, Sector-Based Screens.
MSCI
Names Defense / Weapons (military aerospace and defense equipment, including defense electronics and space equipment) as a prohibited activity, above 5% of revenue from prohibited activities cumulatively.
MSCI Islamic Index Series Methodology (MSCI Inc.), April 2025. Section 2.1, Business Activity Screening.
Scholars differ on investing in defence companies. Some Shariah boards treat weapons manufacturing as impermissible to invest in; others, such as the S&P Shariah committee, treat weapons as neutral. Please consult a qualified scholar for a personal ruling.
Financial Ratio Screen
The second layer checks three financial ratios against defined thresholds. The rationale: even a permissible business should not rely excessively on interest-based instruments.
Interest-Bearing Debt Ratio
Total interest-bearing debt divided by the denominator (market cap or total assets). Must be below the methodology threshold.
Interest-Bearing Securities Ratio
Interest-bearing deposits and securities divided by the denominator. Must be below the threshold.
Non-Permissible Income Ratio
Revenue from impermissible activities divided by total revenue. Must be below 5% across all methodologies.
Methodology Comparison
Multiple legitimate screening standards exist. The same company can be classified differently depending on which methodology is applied — this reflects scholarly diversity, not error.
| Standard | Debt | Cash | Income | Receivables | Denominator |
|---|---|---|---|---|---|
| AAOIFIStandard No. 21 | 30% | 30% | 5% | — | Market Cap |
| DJIMDow Jones Islamic Market | 30% | 30% | 5% | — | Trailing 24-mo Avg Market Cap |
| S&PS&P Shariah Indices | 33% | 33% | 5% | 49% | Trailing 36-mo Avg Market Cap |
| MSCIMSCI Islamic Index | 33.33% | 33.33% | 5% | 33.33% | Total Assets |
AAOIFI
Standard No. 21
30%
30%
5%
—
Denominator: Market Cap
DJIM
Dow Jones Islamic Market
30%
30%
5%
—
Denominator: Trailing 24-mo Avg Market Cap
S&P
S&P Shariah Indices
33%
33%
5%
49%
Denominator: Trailing 36-mo Avg Market Cap
MSCI
MSCI Islamic Index
33.33%
33.33%
5%
33.33%
Denominator: Total Assets
What the Verdicts Mean
Mizaan assigns one of three verdicts. These are classifications based on the screening criteria — not religious rulings.
Passes both business activity and financial ratio screens. No substantive concerns identified.
May pass financial screens but has concerns — such as missing data, borderline ratios, or AI-flagged business activities that warrant scholarly review.
Fails the business activity screen (core business is impermissible) or exceeds one or more financial ratio thresholds.
AI Business Analysis
After the deterministic screening, every stock is queued for AI-assisted business activity analysis. This provides an additional layer of review that the financial ratios alone cannot capture.
Revenue segment analysis
Examines how the company earns its money
SEC filing review
Reads 10-K filings for business activities and risk factors
Concern flagging
Flags specific activities with severity levels and sources
Verdict escalation
High-severity flags can escalate a “Compliant” result to “Questionable”
AI analysis is supplementary — it cannot override the deterministic engine or issue rulings. All flags include their data source so you can verify the concern independently.
Data Sources
Yahoo Finance
Company profiles, income statements, balance sheets, quotes, and market data for every market we screen.
SEC EDGAR
10-K annual filings for US-listed companies — business overview, risk factor sections, revenue segments, and an interest-income cross-check from the XBRL data.
AI Models
Claude (Anthropic) and Gemini (Google) for business activity analysis. AI explains — it never decides.
How Fresh Is the Data
Nothing here is real-time, and we would rather say so than imply otherwise. Each stock page carries a “Data as of” line showing the screening date, the statement period, and — where a quote is shown — the quote time. These are the actual refresh cadences in our code.
Verdicts: up to 7 days
A screening result is cached for 7 days and the public stock page is regenerated on the same cycle. When you open a stock whose cached verdict is older than that, it is re-screened on demand. Weekly jobs re-screen a curated list of about 100 widely held US tickers and every stock that anyone is watching; every other ticker refreshes on demand.
Financial statements: 30 to 90 days
Annual statements are refreshed at most every 90 days and quarterly statements every 30 days. Ratios can only be as current as the company's latest filing, so a statement period that ended several months ago is normal rather than a sign of stale screening. Income ratios always use the annual statement; the balance sheet uses the most recent quarter when one is available.
Market cap and profile: daily
Company profiles and market capitalisation are refreshed once a day. Market cap is the denominator for most methodologies, so a verdict can shift between weekly screenings when a share price moves a lot.
Quotes: delayed, cached for 60 seconds
Prices come from Yahoo Finance and are cached for one minute. They may be delayed and are not a live feed; a price on its own does not change a verdict.
AI business analysis: every 6 hours
Newly screened stocks are queued for AI business analysis, which runs in batches every six hours. Until it completes, the page shows the deterministic verdict and the data confidence pill lists the analysis as pending.
Coverage
Any listing Yahoo Finance has annual financial statements for can be screened, but the depth of the business-activity data differs by market. Every stock page carries a data confidence label and says where its business-activity data came from, so you can see which case applies.
US listings: filing-backed
For companies listed on NASDAQ, NYSE, AMEX and US OTC markets — and foreign companies that file a 20-F or 40-F with the SEC — revenue segments come from SEC EDGAR filings and interest income is cross-checked against the company's XBRL data. The page reads “Business-activity data: SEC filings”. This is the fullest picture we can build.
Other markets: inferred, lower confidence
Canadian (TSX, TSXV, CSE, NEO), UK (LSE), Turkish (BIST) and major European listings are screened on Yahoo Finance statements, with market cap converted into the reporting currency where they differ. Where there is no SEC filing, revenue segments are inferred from the company description by an AI model, and the page reads “Business-activity data: inferred from the company description (lower confidence)”. Filing-based sources for SEDAR+ (Canada) and KAP (Turkey) are not yet connected.
Missing data is shown, not guessed
If a statement line needed for a ratio is missing, that ratio reads “Data Not Available” and the verdict is “Questionable” — neither a pass nor a fail. We do not fill gaps with estimates.
Not covered: said plainly
If Yahoo Finance has no annual income statement or balance sheet for a listing, or no market capitalisation and no total assets to measure the ratios against, the page says the listing is not covered yet and explains why. It shows no verdict in that case. This describes a gap in the data, not the company.
Mizaan's screening is for educational purposes only and does not constitute a fatwa or religious ruling. Users should consult qualified Islamic scholars and financial advisors for personal investment decisions.
Financial data may be delayed or incomplete. Past compliance does not guarantee future status.