How Mizan screens
Mizan applies the thresholds in AAOIFI Shariah Standard No. 21 to each company's latest filings. The same methodology is applied to every security, and the result is a fact about that security — not advice, and not a ruling.
The four screens
| Screen | Rule |
|---|---|
| Business activity | The core business must be permissible, and revenue from impermissible activities must stay under 5%. |
| Interest-bearing debt | Interest-bearing debt must be less than 30% of market capitalisation. |
| Interest-bearing securities | Cash and interest-bearing securities must be less than 30% of market capitalisation. |
| Impermissible income | Income from impermissible sources must be less than 5% of total revenue. |
Why a ratio can change without the company doing anything
Two of the four screens are measured against market capitalisation. A company that takes on no new borrowing at all can still cross the debt limit if its share price falls far enough. Mizan shows how close each ratio is to its limit, and how it has moved over recent quarters, because that is usually the first sign a holding is about to change status.
Purification
For each dividend, Mizan multiplies the amount by the company's impermissible income ratio from its latest filing. That share is set aside for charity. Because it is computed from dividends you actually received, the figure is a ledger rather than an estimate.
What Mizan does not claim
- A status is not a religious ruling. For personal guidance, consult a qualified scholar.
- Where a screen cannot be established from available data, Mizan says so and leaves it open. It does not fill the gap with a guess, and it does not report an unconfirmed screen as a pass.
- Scholars differ on several of these questions, including how zakat applies to shares. Mizan does the arithmetic for the method you choose; it does not choose for you.
Compliance ratings are provided by Zoya (zoya.finance/api). Financial ratios are computed by Mizan from filings with the U.S. Securities and Exchange Commission, and every figure is stored with the accession number of the filing it came from.
Methodology version and screening date are shown on every security in the app, so a status can always be traced to the data behind it.