Salam wondering where you get your data from. Want to ensure you are getting accurate data
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JAK but I am wondering where they get the financial reporting data from?
Salaam and welcome, @Newinvestor! As @firoze noted, our shariah compliance screening is done in-house. Our research is powered by independent, objective data from some of the most trusted providers in the world such as FactSet, IEX, and a few others. In some cases, we source data ourselves directly from SEC filings.
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JAK for the reply. That makes sense for the financial screening of a company, however, how do you do the business screening for a company? Do you just look at Intrest income as a source of impermissible income? Please provide more details on the business screening.
hi @Newinvestor, thanks for asking for the clarification. I’m wondering is there a example of interest income that you’re seeing that doesn’t make sense?
No example but I am just wondering how you determine the business screening of a stock? It stands to reason that Pork, Gambling, etc are definitely impermissible but for more nuanced industries like Airlines how do you determine if they are Shariah-compliant or not?
There are what are called SIC codes on securities filings that give industry classification. This is the default screen.
This method is not perfect, as there are exceptions, and meets most users’ needs.
We actually go a bit beyond that. The SIC Codes tell us what industries the companies operate in, but in addition to that our revenue breakdown is normally informed by their annual filings, there are cases where we use their prospectus. In the app all Zoyans on the Pro Plan can see the revenue breakdown and the source of our data.
For example if we check Delta Airlines, $DAL, in the app, Revenue Breakdown screen shows that 39.05% of the company’s revenue is from Tickets - Main Cabin. Now tickets being sold in the main cabin looks alright, but Delta and other Airlines generate revenue from the sale of Alchoholic beverages on their flight. Since their annual 10-K report, they don’t have a separate revenue segment for confections and beverages and we don’t have a way of knowing how much of that Tickets - Main Cabin revenue is from the sale of alcohol, the entire segment is questionable. If we knew, and could confirm, that less that 5% of the Tickets - Main Cabin revenue is from the sale of Alcohol our analysis could change.
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Hi Farhan,
Do you have the same reports like 10-K for european companies and especially french companies. My second question is the datas from the 10-K is enough to say that a company is shariah or you must make an audit in the company with special auditors ?
Many thanks
Great question. So I took look at Alstom, you can pull it up in the app as well. You’ll see we’re using the company’s Annual Report to make our decision with regards to their business screening, At the moment, we’re using the same report for their financials as well, but companies typically publish financials throughout the year and we update our reports accordingly.
All the information we use at Zoya is publicly available. No special company audits or special auditors. This might be something we’ll explore in the future, no promises.
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Thank you so much for your response.
Have a great day.
Farid