2. Formulas

What are formulas?

Formulas are instructions that perform calculations or operations on data in your spreadsheet. They always begin with an equals sign, =, and can include numbers, cell references, mathematical operators (like +, -, *, or /), and bulit-in functions like sum() or average().

A simple example formula is =1+1 which computes the value of the expression 1+1 and displays the result in the cell:

Excel automatically calculates the value of formulas when underlying data or cell references change which makes them extremely useful for things like data analysis, budgeting, and complex spreadsheet operations.

How do I use formulas?

In the below example, we have a spreadsheet that includes values for the total Revenue and Total Cost from a fundraising campaign. We would like to compute the net revneue:

Since net revenue is Total Revenue - Total Cost, we can use a formula in cell B3 to calculate net revenue. Becuase we already have Total Revenue in cell B1 and Total Cost in cell B2, our formula can use cell references to calculate the cost, using B1 to refer to Total Revenue and B2 to refer to Total Cost. This means our formula is =B1-B2:

Because we’re using cell references in our formula, any time the data in cell B1 or B2 changes, the result of our formula will update. For example, let’s say we get $10,000 more revenue this week from the campaign and update the value in cell B2 to $110,000. Our Net Revenue value automatically updates:

Key takeaways

• Formulas prodvide a way for you to perform operations on values in your spreadsheet
• Formulas can use literal values like numbers or can use cell references to make your spreadsheet dynamic
• Formulas automatically calculate, so any time a cell referenced in your formula changes, your formula recalculates automatically