Islamic Economics
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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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Solvency Ratios: Can Your Business Pay Off Future Debts?
Solvency ratios are vital indicators of a company’s long-term financial health. They provide insight into a business’s ability to meet its long-term debt obligations without jeopardizing its operational viability or shareholders’ equity. While businesses may face periods of financial strain, maintaining strong solvency ratios can significantly reduce financial risk and enhance creditworthiness, making it easier for companies to attract investors…
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Liquidity Ratio: Can Your Business Pay Short-Term Debt?
Liquidity ratio is a crucial financial analysis tool used to assess a company’s ability to meet its short-term liabilities. By examining liquidity ratios, stakeholders can evaluate whether a company has enough liquid assets to cover its short-term debt obligations, thereby ensuring the financial health of the company. A strong liquidity position implies that a business is well-positioned to manage its…
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Important Principles on How Islam Views Investment
Investment is a widely accepted way to grow wealth and achieve financial stability. In Islam, investment is not only allowed but also encouraged, provided it adheres to Shariah principles, which emphasize justice, transparency, and the avoidance of prohibited elements such as riba (interest), gharar (uncertainty), and maysir (excessive speculation). This article explores how Islam views investment and how Muslims can…
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Artificial Intuition: The Future of Business Decision-Making
In the rapidly evolving digital landscape, businesses are constantly seeking innovative tools and approaches to stay competitive. While Artificial Intelligence (AI) has been a dominant force, a new concept is gaining traction: Artificial Intuition (AIu). Artificial intuition is distinct from traditional AI as it mimics human intuition, making fast decisions based on patterns and experiences without relying on complex logic…
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The Story of Ayam Bakar Wong Solo: A Simple, Scalable Business
Ayam Bakar Wong Solo is a remarkable example of how a small business in the food industry can grow into a large-scale operation with hundreds of outlets, both domestically and internationally. Founded by Puspo Wardoyo, this business has expanded significantly from its humble beginnings into a renowned franchise, proving that a simple product like grilled chicken can lead to substantial…
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Price to Book Value: Is Your Stock Overvalued?
Investing in stocks is a popular strategy to build wealth over the long term. However, determining whether a stock is worth buying can be a challenge for many investors. One of the most common methods to evaluate whether a stock is overpriced or still worth buying is by using the Price to Book Value (PBV) ratio. In this article, we…
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Internal Rate of Return: Know Your Profit Goal
The Internal Rate of Return (IRR) is a key financial tool used by investors to measure the return on an investment. By understanding IRR, investors can decide whether a project is worth pursuing based on its expected return. This article explores IRR’s definition, calculation, main functions, benefits, and limitations. What is Internal Rate of Return (IRR)? Internal Rate of Return…
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