Methodology
How Akinda screens stocks
Every halal verdict the API returns comes from a documented three-phase screen aligned with AAOIFI principles. This page spells out the exact rules, thresholds, formulas, and field mappings so any consumer of the API — or the customer's Shariah board — can audit the math end to end.
Akinda runs those same three phases under five methodologies. AAOIFI is the one behind every verdict, rating and ratio Akinda publishes; inside each screen below you will also find what DJIM, FTSE, MSCI and S&P require, each with its own denominator, threshold and field on the API.
Business activity
Phase 1: Sector & revenue screen
First, we check what the company actually does for a living. If its primary line of business sits in a prohibited sector — alcohol, conventional banking and insurance, gambling, tobacco, pork, adult entertainment, weapons — the stock is disqualified outright. For companies in mixed-business sectors, prohibited-segment revenue must stay below the 5% threshold of total reported revenue.
1. Excluded business activities
Every methodology starts from the same sector list, then adds to it or permits something out of it. The differences are real: conventional defense is excluded by FTSE and MSCI and permitted by DJIM and S&P.
AAOIFI
PrimaryAAOIFI Shari'ah Standard No. 21The base list: conventional banks and regional banks, mortgage lenders, asset managers, stock and securities exchanges, derivatives dealers and clearing houses, insurance and life insurance, healthcare plans, tobacco, alcohol (brewers, distillers, vintners), gambling and casinos, and pork / non-halal meat.
DJIM
Dow Jones Islamic Market IndicesThe base list, plus weapons for non-defense purposes only. Conventional defense is permitted.
FTSE
FTSE Shariah Global Equity Index SeriesThe base list, plus defense, hotels, cinema, music, and cannabis in any form.
MSCI
MSCI Islamic Index SeriesThe base list, plus defense, hotels, music (including musical instruments), cinema, and online dating.
S&P
S&P Shariah IndicesThe base list, plus advertising, music, and cinema. Defense is permitted.
Preferred shares and fixed-income instruments are excluded by instrument, whatever the company does.
2. Non-compliant revenue
What counts as non-compliant income, and what it is divided by. The denominator is where these diverge — FTSE is the only one that does not add interest income back into it.
AAOIFI
PrimaryAAOIFI Shari'ah Standard No. 21prohibited income (interest + prohibited) > 5% → NOT HALAL; impure income (including half-weighted doubtful) > 5% → DOUBTFUL
Variables: interest income + revenue from prohibited segments. Doubtful revenue is counted at half weight, which is what separates a DOUBTFUL verdict from a NOT HALAL one.
Field on the API: non_compliant_revenue_perc
DJIM
Dow Jones Islamic Market Indicesnon-permissible revenue including all interest income ÷ (revenue + interest) — < 5%
Field on the API: non_compliant_revenue_perc_djim
FTSE
FTSE Shariah Global Equity Index Series(interest + non-compliant activities income) ÷ revenue only — ≤ 5%
Variables: the only methodology whose denominator is revenue alone — interest income is not added back to it.
Field on the API: non_compliant_revenue_perc_ftse
MSCI
MSCI Islamic Index Series(prohibited revenue + interest) ÷ (revenue + interest) — ≤ 5%
Field on the API: non_compliant_revenue_perc_msci
S&P
S&P Shariah Indicesnon-permissible income including all interest ÷ (revenue + interest) — < 5%
Field on the API: non_compliant_revenue_perc_sp
Financial ratios
Phase 2: The financial limits
A company that passes the business-activity screen still needs to clear two quantitative ratios — debt and liquidity / interest-bearing cash position — each measured against the same denominator: the company's average market capitalization over the trailing 12 quarters. Both thresholds are set to 30%, aligned with the strict AAOIFI / DJIM reading.
That is AAOIFI. The index methodologies measure the same ratios against their own denominator — total assets for FTSE and MSCI, a 24- or 36-month average market value for DJIM and S&P — and two of them add a third test, on receivables. Each is listed under the rule it belongs to.
1. Debt limit
A permissible company cannot be built on excessive interest-bearing loans.
AAOIFI
PrimaryAAOIFI Shari'ah Standard No. 21(short-term + long-term debt) ÷ 12-quarter average market cap — fails at ≥ 30%
Variables: short-term debt + long-term debt + capital lease obligations. Operating liabilities (e.g. payables) are excluded when they do not bear interest.
Field on the API: debt_ratio_perc
DJIM
Dow Jones Islamic Market Indicesinterest-bearing debt ÷ 24-month average market cap — < 33% until close 2026-09-18, < 30% after
Field on the API: debt_ratio_perc_djim
FTSE
FTSE Shariah Global Equity Index Seriesdebt ÷ total assets — < 33.333%
Field on the API: debt_ratio_perc_ftse
MSCI
MSCI Islamic Index Seriestotal debt ÷ total assets — ≤ 33.33%
Field on the API: debt_ratio_perc_msci
S&P
S&P Shariah Indicesdebt ÷ 36-month average market value of equity — < 33%
Field on the API: debt_ratio_perc_sp
2. Liquidity / interest-bearing cash position
Cash should support real operations — not let the company effectively run a bank by parking funds in yield-bearing instruments. This single ratio captures both the “cash” and “interest-bearing investments” AAOIFI checks.
AAOIFI
PrimaryAAOIFI Shari'ah Standard No. 21(cash + short-term investments) ÷ 12-quarter average market cap — fails at ≥ 30%
Variables: cash & cash equivalents + short-term investments (interest-bearing cash equivalents, money-market holdings, short-term marketable securities). Receivables can optionally be included as a stricter mode — disabled by default to match AAOIFI Standard 21.
Field on the API: liquidity_ratio_perc
DJIM
Dow Jones Islamic Market Indices(cash + interest-bearing securities) ÷ 24-month average market cap — < 30%, only from 2026-09-18
Field on the API: liquidity_ratio_perc_djim
FTSE
FTSE Shariah Global Equity Index Series(cash + interest-bearing items) ÷ total assets — < 33.333%
Field on the API: liquidity_ratio_perc_ftse
MSCI
MSCI Islamic Index Series(cash + interest-bearing securities) ÷ total assets — ≤ 33.33%
Field on the API: liquidity_ratio_perc_msci
S&P
S&P Shariah IndicesNo screen (removed 2023-09-15)
Field on the API: liquidity_ratio_perc_sp — the key is always present and always null, so a consumer never has to guess whether it was dropped.
3. Receivables
How much of the balance sheet is money owed rather than assets at work. AAOIFI sets no limit here; two of the index methodologies do.
AAOIFI
PrimaryAAOIFI Shari'ah Standard No. 21No screen
Field on the API: receivables_ratio_perc — the key is always present and always null, so a consumer never has to guess whether it was dropped.
DJIM
Dow Jones Islamic Market IndicesNo screen (removed 2023)
Field on the API: receivables_ratio_perc_djim — the key is always present and always null, so a consumer never has to guess whether it was dropped.
FTSE
FTSE Shariah Global Equity Index Series(accounts receivable + cash) ÷ total assets — < 50%
Field on the API: receivables_ratio_perc_ftse
MSCI
MSCI Islamic Index Series(accounts receivable + cash) ÷ total assets — ≤ 70%
Field on the API: receivables_ratio_perc_msci
S&P
S&P Shariah IndicesNo screen (removed 2023)
Field on the API: receivables_ratio_perc_sp — the key is always present and always null, so a consumer never has to guess whether it was dropped.
Outcome
Phase 3: Final verdict & purification
After the AI auditor processes SEC filings and the API data through those formulas, each stock receives one of three statuses — surfaced on the API as the halal_status field.
Halal
Passed both business activity and financial ratio screens (permissible).
Not Halal
Failed the 5% revenue rule or one of the 30% financial limits.
Doubtful
Data incomplete, or a major merger / acquisition temporarily obscures true financials.
The verdict, per methodology
The three states above are AAOIFI's. The doubtful category and its half-weighting are an Akinda convention that follows AAOIFI — the four index methodologies have no doubtful state, and their result is pass or fail.
AAOIFI
PrimaryAAOIFI Shari'ah Standard No. 21HALAL / DOUBTFUL / NOT HALAL
Field on the API: halal_status
DJIM
Dow Jones Islamic Market IndicesBinary: HALAL / NOT HALAL
Field on the API: halal_status_djim
FTSE
FTSE Shariah Global Equity Index SeriesBinary: HALAL / NOT HALAL
Field on the API: halal_status_ftse
MSCI
MSCI Islamic Index SeriesBinary: HALAL / NOT HALAL
Field on the API: halal_status_msci
S&P
S&P Shariah IndicesBinary: HALAL / NOT HALAL
Field on the API: halal_status_sp
A note on purification: if a halal stock has a small amount of non-permissible income (e.g. 2%, which still passes the 5% rule), investors typically purify dividends by donating that portion to charity. Akinda calculates and exposes that purification percentage on /full-report, so consumers can present an exact number to end users.
Read a methodology in depth
Each methodology has its own page: who writes it, every screen with its numerator and denominator, the full exclusion list, the review cadence, and what Akinda deliberately does not implement.
AAOIFI Shari'ah Standard No. 21
The standard Akinda's own verdict follows. Every status, rating and ratio elsewhere on Akinda is this one.
Dow Jones Islamic Market Indices
The oldest of the index screens, and the only one whose thresholds change on a known date.
FTSE Shariah Global Equity Index Series
Balance-sheet based throughout, and the strictest on what counts as revenue.
MSCI Islamic Index Series
The most permissive ratios of the four, and the widest business exclusions.
S&P Shariah Indices
Leverage is the only accounting screen left — the cash and receivables tests were retired in 2023.
Akinda applies each methodology's published financial ratios. The business-activity classification is Akinda's own, built from company filings. It is not the index provider's own screening data. Akinda is not affiliated with, endorsed by, or licensed by AAOIFI, S&P Dow Jones Indices, FTSE Russell, MSCI or Yasaar.
These are raw-ratio verdicts, computed as if the stock were screened today. Index buffers and grace periods are not applied. A verdict here can therefore differ from a company's actual membership of an index.
AAOIFI is Akinda's primary methodology. The status, rating and ratios shown everywhere else on Akinda are AAOIFI.
Shariah Advisor
Dr. Muhammad Nazir Khan
Dr. Khan advises Akinda on Shariah screening methodology and alignment with AAOIFI-oriented principles. His guidance helps keep the rules transparent, consistent, and grounded in recognized Islamic finance practice — including certification perspectives relevant to compliant securities analysis (CSAA).
Try the methodology, live
Open the API playground, fire /full-report/AAPL (or any ticker) with your own key, and read every field named on this page back from the wire response.