The Short Answer
Allison Transmission stock (ALSN) is currently doubtful on the stored quantitative screen. Manufacturing vehicle propulsion is generally permissible, but the latest filing shows debt/assets materially above the examined limits.
Current quantitative Sharia screen
Based on 10-Q figures for the period ended 2026-03-31; calculated 2026-07-15.
4,267 / 8,703
338 / 8,703
1,203 / 8,703
- Financial
- Fails
- Overall
- Fails
Debt/assets is 49.03%, above the examined 33.333% limit; liquidity/assets is 3.88% and receivables-plus-cash/assets is 13.82%.
- Financial
- Fails
- Overall
- Fails
Debt/assets is 49.03%, above the examined MSCI limit; the asset-based screen fails.
- Financial
- Fails
- Overall
- Fails
Debt/assets is 49.03%, above the examined Malaysia limit; this is not an official classification.
- Financial
- Not calculated
- Overall
- Fails
A properly licensed and reproducible historical market-cap series is not stored; the debt screen already fails.
Business-activity disclosure
Allison designs and manufactures automatic transmissions and electrified propulsion systems for commercial vehicles, buses and defense vehicles. Vehicle-propulsion manufacturing is generally permissible, while defense end use, customer concentration and acquisition integration require qualitative review.
Limitation: The filing does not allocate revenue by downstream end use or provide a universal prohibited-revenue or non-compliant-income numerator.
Purification
The filing reports net interest expense but no reproducible gross non-compliant-income numerator; no fixed purification percentage is asserted.
Inputs, assumptions and primary sources
- Amounts are USD millions from Allison Transmission Holdings' March 31, 2026 Form 10-Q.
- Debt combines current portion of long-term debt of $20 million and long-term debt of $4,247 million.
- Cash is $311 million and marketable securities are $27 million; the securities are included in the liquidity proxy.
- Accounts receivable, net are $892 million.
- The filing reports net interest expense but no reproducible gross non-compliant-income numerator.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
The current filing-based analysis treats the financial result as doubtful. Debt/assets fails under FTSE, MSCI and Malaysia-style asset-based methods despite low liquidity and receivables ratios.
Sharia Screening Methodology
Islamic scholars use several criteria to screen stocks:
- Business activity screen: Is the company's primary business halal?
- Debt ratio: Total debt / market cap must be under 33%
- Interest income: Interest income / total revenue must be under 5%
- Haram revenue: Revenue from haram sources must be under 5%
- Receivables ratio: Total receivables / total assets must be under 49–70% (varies by board)
Allison Transmission's Business Activity
Allison Transmission Holdings, Inc. designs and manufactures propulsion systems for commercial vehicles. Its activity is:
- Automatic transmissions: Fully automatic transmissions for trucks and buses
- Defense: Transmissions for tracked and wheeled defense vehicles
- Electrified propulsion: Electric and hybrid propulsion systems
Manufacturing vehicle propulsion systems is a clearly permissible activity with no haram revenue line of its own.
Why ALSN Is Halal
1. Permissible Core Business
Producing transmissions and propulsion systems is a halal manufacturing business. There is no gambling, conventional banking, alcohol, or other prohibited line at the heart of the business.
2. Leveraged-Buyout Legacy Debt Is the Deciding Screen
Allison carries debt that traces to its leveraged-buyout history, so total debt / market cap is the deciding screen. Confirm it sits under the 33% threshold on the latest filings before investing — cash flow has supported deleveraging, but the verdict is debt-dependent and can move with the balance sheet.
3. Interest on Cash to Purify
Incidental interest income on cash should be checked against the 5% threshold and the corresponding small portion of returns purified. As a commercial-vehicle supplier, ALSN's results are cyclical with commercial-vehicle production.
Current Filing-Based Quantitative Screen
Allison Transmission's March 31, 2026 Form 10-Q reports the following transparent total-assets proxies:
- Debt / assets: 49.03% — above the examined 33.333% limits ❌
- Liquidity / assets: 3.88% — below the examined limits ✅
- Receivables + cash / assets: 13.82% — below the examined limits ✅
- Business activity: Vehicle propulsion is generally permissible; defense end use remains qualitative ⚠️
Methodology Interpretation
The stored record applies transparent total-assets proxies for FTSE Yasaar, MSCI Islamic and Malaysia SAC-style tests. All three fail on debt. No reproducible gross non-compliant-income numerator is disclosed, and no third-party app classification is asserted.
- FTSE Yasaar-style asset tests: fail on debt
- MSCI Islamic-style asset tests: fail on debt
- Malaysia SAC-style ratios: fail on debt; not an official classification
- Market-cap denominator: not calculated from a reproducible licensed series
Bottom Line
Allison Transmission (ALSN) is doubtful in the current filing-based analysis. The commercial-vehicle propulsion business is permissible, but debt/assets is 49.03%, above the examined asset-based limits. Re-screen after debt repayment, acquisition integration or the next filing.
For Muslim investors seeking industrial exposure, compare ALSN with peers like Lear (LEA), Autoliv (ALV), and Commercial Metals (CMC).
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