Strict classical fiqh would exclude almost every modern public company — nearly all of them carry some interest-bearing debt somewhere in their capital structure. Contemporary AAOIFI scholarship addresses this with a materiality threshold rather than a zero-tolerance rule: interest-bearing debt is tolerated up to 30% of market capitalization.
Why market cap, not book value?
Sanad measures the ratio against market capitalization rather than the company's book value of equity. Market cap reflects what the market actually believes the company is worth today; book value is a historical accounting figure that can badly understate or overstate a company's real size — especially for asset-light or high-growth businesses. Measuring debt against a stale book value could make an otherwise healthy company look far more leveraged than it really is, or the reverse.
Where it stops applying
This ratio test only ever runs for companies that already passed the business-activity screen. A conventional bank isn't compared against a 30% threshold — its core business is interest-based, so it's excluded outright regardless of any ratio. The threshold exists to handle incidental, non-core debt in an otherwise halal business, not to launder a fundamentally impermissible one.