Islamic Economics
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Muslim Business Ethics Part 2: Fulfilling Promises
In the world of business, trust is one of the most valuable assets a Muslim can possess. To maintain this trust, one of the primary principles in Islamic business ethics is fulfilling promises. Promises made by a Muslim, whether in formal agreements or verbal commitments, carry great significance and must be honored sincerely. This integrity is part of a Muslim’s…
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Application of Maqashid Sharia in the Green Economy
With growing global awareness of the need to protect the environment and reduce the adverse effects of economic activities on nature, the concept of a green economy has emerged as a way toward sustainable development. According to the United Nations Environment Programme (UNEP), the green economy is an economic approach that aims to enhance social welfare while reducing environmental risks…
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Supporting MSMEs as a Foundation of the People’s Economy
Micro, Small, and Medium Enterprises (MSMEs) are widely recognized as a crucial foundation of Indonesia’s economy. In a country with a vast and diverse population, Indonesia relies heavily on this sector to drive inclusive and sustainable economic growth. MSMEs play a significant role in creating jobs, increasing household income, and expanding the economic base, previously dominated by larger industries. Beyond…
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Important Muslim Business Ethics Part 1: Amanah
In Islam, business ethics serve as a fundamental guideline that every Muslim must adhere to. One of the most essential principles in conducting business according to Islamic teachings is amanah, or trustworthiness. Amanah refers to honesty, transparency, and trustworthiness in all transactions. In this article, we will discuss how amanah is an integral part of Islamic business ethics. 1. The…
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EBITDA: How to Understand Operational Profit
EBITDA is one of the essential financial indicators used to assess a company’s performance. This term is frequently used by financial analysts, investors, and management to understand how efficiently a company generates profits from its core operations. This article will discuss what EBITDA is, how to calculate it, why it is important, and some criticisms of its use. What is…
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Return on Assets (ROA): Are Your Assets Maximized?
In the modern business landscape, ensuring efficient utilization of company assets is essential for long-term profitability and competitiveness. One key metric that helps measure how effectively a company is using its assets is Return on Assets (ROA). ROA provides insights into how much profit a business generates from its assets, making it a valuable tool for management, investors, and stakeholders.…
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Return on Equity: How Shareholders Measure Their Returns
Return on Equity (ROE) is one of the most widely used financial metrics by investors to assess the profitability of a company. It provides a clear picture of how efficiently a company is using its shareholders’ equity to generate profits. In simpler terms, ROE shows how much profit a company makes with the money shareholders have invested. This article will…
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Islamic Ruling on Mudharib (in Mudharabah) Taking Profits Before the Final Calculation
Mudharabah is a form of partnership in Islamic economic systems involving two main parties: the capital provider (shahibul maal) and the entrepreneur or manager (mudharib). The capital provider supplies the funds, while the mudharib manages the business using those funds. Profits are shared according to a pre-agreed ratio, while losses are borne by the shahibul maal, except when losses occur…
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Scrub Daddy: An Inspirational Story of a Simple Business
Scrub Daddy is a simple product that has become one of the greatest success stories in the history of the television show Shark Tank. The initial idea came from a daily need: a sponge that could clean various surfaces more effectively. Within a few years, Scrub Daddy managed to reshape the household cleaning product market in the United States and…
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Activity Ratios: Know How Your Business Performs
Activity ratios are important indicators used to measure a company’s operational efficiency in utilizing its assets to generate revenue. By understanding various types of activity ratios, businesses can assess how effectively they are using their resources, such as inventory, receivables, and fixed assets. This article will discuss several key activity ratios, along with examples, to provide a clearer understanding of…
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