How is the zakat calculated for a grocery store whose inventory has reached the zakat threshold and on which zakat is due, but the store does not have sufficient cash liquidity to pay it, especially since the owner also has a debt?

Scholars have differed on the issue of zakat (definition) for someone who owes a debt but possesses a nisaab (minimum amount subject to zakat). The preponderant opinion is that debt does not prevent the obligation of zakat. Thus, the inventory is appraised, and zakat is disbursed from the entire wealth, without deducting the debt.

As for disbursing zakat when you do not have cash, the preponderant opinion is that it is permissible to disburse it in kind, from the goods you have in your shop. Sheikh al-Islam, may Allah have mercy on him, said: "It is permissible to disburse the zakat of trade goods in kind." Sheikh Ibn Baz, may Allah have mercy on him, was asked: Is it permissible to disburse zakat from fabrics? He replied: "That is permissible according to the soundest of scholarly opinions: good for good, and bad for its like, according to the value, while being keen on what clears one's liability, because zakat is a consolation from the rich to the poor. So, he may console them with fabric from fabric, just as he consoles them with grains, dates, and zakat-eligible livestock from their own kind."