Halal Stock Market Investing for Beginners/Lesson 4: Shariah Screening — How to Check if a Stock is Halal
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Two-level funnel showing qualitative screening first, then quantitative screening
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The Two Levels of Screening
Shariah screening of stocks happens in two stages:
- Qualitative Screening (Business Activity) — What does the company DO? Is its core business halal or haram?
- Quantitative Screening (Financial Ratios) — Even if the business is halal, are its financial practices within acceptable limits?
A stock must pass both levels to be considered Shariah-compliant. Let's look at each one.