What is the CAR ratio formula?

CAR = (Tier 1 capital + Tier 2 capital) / risk-weighted assets × 100%. Using supplied example values of 1,050, 375 and 10,000, total capital is 1,425 and CAR is 14.25%. Tier 1 / RWA gives 10.50% and Tier 2 / RWA gives 3.75%. These are arithmetic examples, not lending, investment or regulatory judgements.

What is the difference between Tier 1 and Tier 2 capital?

Tier 1 and Tier 2 are supplied capital categories that this formula adds together. Their eligibility and adjustments depend on the applicable framework. This calculator accepts the two totals you provide; it does not classify instruments or determine whether the totals qualify.

What are risk-weighted assets, and why does this page not calculate them?

Risk-weighted assets are the supplied denominator in all three tier ratios. Determining that value requires a separate weighting process under the applicable framework. Enter a positive value you already have; the page has no asset-class table or weighting calculation.

Why is there no minimum or pass mark on this page?

The page performs the stated division only. It has no jurisdiction, reporting date or institution-specific requirements with which to assess the result. It gives no regulatory verdict, lending decision or investment guidance.

How do I enter the figures, and does the unit matter?

Use whatever unit your statements use, as long as all three fields match: thousands, millions or whole currency all give the same percentages. The displayed Total capital amount uses the unit you entered. Thousands separators are read rather than refused, so 10,000 and 10 000 both arrive as ten thousand and 1,05,000 is read as one hundred and five thousand. A currency sign in front of a figure is ignored. If a field is empty or cannot be read as one number, the page says which field it is rather than showing a blank.

What does the Tier 2 share tell me?

It is Tier 2 capital as a percentage of total capital, so 375 of Tier 2 in 1,425 of total capital is a share of 26.32%. It answers a different question from the Tier 2 ratio, which measures the same Tier 2 against risk-weighted assets instead. The share describes the composition of your capital and nothing more: the page does not compare it with any limit, because the treatment of the two tiers is a matter for your own jurisdiction's rules.

Is anything I type sent anywhere?

No. The division runs in your browser and nothing is uploaded, so a capital figure never leaves the device. The last three numbers you typed are kept in this browser's own local storage so the page opens where you left it, and clearing your site data removes them. There is no account and no upload step anywhere in the tool.

How can I reproduce the CAR calculation in Excel or Google Sheets?

With Tier 1 in A2, Tier 2 in B2 and positive risk-weighted assets in C2, use =(A2+B2)/C2 and format the cell as a percentage. Alternatively, use =100*(A2+B2)/C2 as an ordinary numeric percentage value. Use the same units for all three inputs. This reproduces ratio arithmetic only.

Capital Adequacy Ratio Calculator

For an educational capital adequacy ratio calculation, enter supplied Tier 1 capital, Tier 2 capital and risk-weighted assets in matching units. The calculator below shows the total CAR, each tier ratio, the Tier 2 share and the numeric substitution. It does not derive risk weights, decide which capital qualifies or assess an institution.

Capital adequacy ratio14.25%(1,050 + 375) ÷ 10,000 · Tier 1 ratio 10.50%

Tier 1 capital

Tier 2 capital

Risk-weighted assets

Every figure goes in the same units, and it does not matter which: thousands, millions or whole currency, as long as all three match. Commas and spaces are read as grouping, so 1,05,000 and 105 000 both arrive as the same number.

Total capital ratio(Tier 1 + Tier 2) ÷ RWA
14.25%
Tier 1 ratioTier 1 ÷ RWA
10.50%
Tier 2 ratioTier 2 ÷ RWA
3.75%
Tier 2 shareof total capital
26.32%
Total capitalTier 1 + Tier 2
1,425

The formula, not a judgement. No minimum ships with this page and no pass or fail is rendered. Regulators set the minimum and its buffers by jurisdiction and revise them, and a labelled figure still reads as current to whoever is holding their own number beside it. Risk weights are yours to apply, so risk-weighted assets are a box you fill in rather than something this page works out for you. Exact division on the figures you enter: it computes the Basel formula and nothing else. It cannot know your jurisdiction's current minimum, how your assets were risk-weighted, or whether these are the figures a regulator would accept.

Common questions

What is the CAR ratio formula?: CAR = (Tier 1 capital + Tier 2 capital) / risk-weighted assets × 100%. Using supplied example values of 1,050, 375 and 10,000, total capital is 1,425 and CAR is 14.25%. Tier 1 / RWA gives 10.50% and Tier 2 / RWA gives 3.75%. These are arithmetic examples, not lending, investment or regulatory judgements.
What is the difference between Tier 1 and Tier 2 capital?: Tier 1 and Tier 2 are supplied capital categories that this formula adds together. Their eligibility and adjustments depend on the applicable framework. This calculator accepts the two totals you provide; it does not classify instruments or determine whether the totals qualify.
What are risk-weighted assets, and why does this page not calculate them?: Risk-weighted assets are the supplied denominator in all three tier ratios. Determining that value requires a separate weighting process under the applicable framework. Enter a positive value you already have; the page has no asset-class table or weighting calculation.
Why is there no minimum or pass mark on this page?: The page performs the stated division only. It has no jurisdiction, reporting date or institution-specific requirements with which to assess the result. It gives no regulatory verdict, lending decision or investment guidance.
How do I enter the figures, and does the unit matter?: Use whatever unit your statements use, as long as all three fields match: thousands, millions or whole currency all give the same percentages. The displayed Total capital amount uses the unit you entered. Thousands separators are read rather than refused, so 10,000 and 10 000 both arrive as ten thousand and 1,05,000 is read as one hundred and five thousand. A currency sign in front of a figure is ignored. If a field is empty or cannot be read as one number, the page says which field it is rather than showing a blank.
What does the Tier 2 share tell me?: It is Tier 2 capital as a percentage of total capital, so 375 of Tier 2 in 1,425 of total capital is a share of 26.32%. It answers a different question from the Tier 2 ratio, which measures the same Tier 2 against risk-weighted assets instead. The share describes the composition of your capital and nothing more: the page does not compare it with any limit, because the treatment of the two tiers is a matter for your own jurisdiction's rules.
Is anything I type sent anywhere?: No. The division runs in your browser and nothing is uploaded, so a capital figure never leaves the device. The last three numbers you typed are kept in this browser's own local storage so the page opens where you left it, and clearing your site data removes them. There is no account and no upload step anywhere in the tool.
How can I reproduce the CAR calculation in Excel or Google Sheets?: With Tier 1 in A2, Tier 2 in B2 and positive risk-weighted assets in C2, use =(A2+B2)/C2 and format the cell as a percentage. Alternatively, use =100*(A2+B2)/C2 as an ordinary numeric percentage value. Use the same units for all three inputs. This reproduces ratio arithmetic only.

Exact division on the figures you enter: it computes the Basel formula and nothing else. It cannot know your jurisdiction's current minimum, how your assets were risk-weighted, or whether these are the figures a regulator would accept.