Definition
A stock qualifies only if its core business is permissible and it meets financial limits, such as interest-bearing debt below 37% of assets, non-compliant income below 5% of revenue, and net liquid assets below 49% of total assets. Banks and conventional insurers are typically excluded.
Worked example
An investor following Islamic principles may hold LUCK or ENGRO if they currently pass Shariah screening, but avoid conventional banks.