Stock Screening - Cash ratio

Assalamu alaykum

I am currently screening a stock (On The Beach) to determine whether it is shari’ah compliant. Could you please confirm whether cash in restricted accounts (i.e. a trust fund) on an annual report should be included as part of the total cash/accounts receivable to total assets ratio?

Barak’Allahu feek

Wa alaykum salaam,

Can you check the notes to see for what purpose it is restricted?

Assalamu alaykum Mufti

JzkAllahkher for your reply. The explanation for the trust account is as follows:
“ OTB is also the only listed UK travel business that operates a fully ring-fenced customer trust account in which customer funds are held until the point of travel”

So On the Beach doesn’t have access to this money until either the customer travels or a refund is due. Could you please confirm whether this should count as part of the cash calculation?


Assalamu alaykum @Mufti_Faraz_Adam, @Mufti_Billal, would you be provide any insight on this please? JzkAllahkher

Any advice on the reply to you above please @Mufti_Faraz_Adam?


Assalaamu alaykum,

The liquidity filter is no longer considered in the AAOIFI screening criteria. It is no longer a requirement to have a 70% max cash and and receivables filter.

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Wa alaykum salaam

JzkAllahkher for your advice Mufti.