If you're new to Excel, you'll soon find that it's more than just a grid in which you enter numbers in columns or rows. Sure, you can use Excel to find totals for a column or row of numbers, but you can also calculate a mortgage payment, solve math or engineering problems, or find a best case scenario based on variable numbers that you plug in.
Excel does this by using formulas in cells. A formula performs calculations or other actions on the data in your worksheet. A formula always starts with an equal sign (=), which can be followed by numbers, math operators (like a + or  sign for addition or subtraction), and builtin Excel functions, which can really expand the power of a formula.
For example, the following formula multiplies 2 by 3 and then adds 5 to that result to come up with the answer, 11.
=2*3+5
Here are some additional examples of formulas that you can enter in a worksheet.

=A1+A2+A3 Adds the values in cells A1, A2, and A3.

=SUM(A1:A10) Uses the SUM function to return sum of the values in A1 through A10.

=TODAY() Returns the current date.

=UPPER("hello") Converts the text "hello" to "HELLO" by using the UPPER function.

=IF(A1>0) Uses the IF function to test the cell A1 to determine if it contains a value greater than 0.
The parts of an Excel formula
A formula can also contain any or all of the following: functions, references, operators, and constants.
Parts of a formula
1. Functions: The PI() function returns the value of pi: 3.142...
2. References: A2 returns the value in cell A2.
3. Constants: Numbers or text values entered directly into a formula, such as 2.
4. Operators: The ^ (caret) operator raises a number to a power, and the * (asterisk) operator multiplies numbers.
Using constants in Excel formulas
A constant is a value that is not calculated; it always stays the same. For example, the date 10/9/2008, the number 210, and the text "Quarterly Earnings" are all constants. An expression or a value resulting from an expression is not a constant. If you use constants in a formula instead of references to cells (for example, =30+70+110), the result changes only if you modify the formula. In general, it's best to place constants in individual cells where they can be easily changed if needed, then reference those cells in formulas.
Using calculation operators in Excel formulas
Operators specify the type of calculation that you want to perform on the elements of a formula. Excel follows general mathematical rules for calculations, which is Parentheses, Exponents, Multiplication and Division, and Addition and Subtraction, or the acronym PEMDAS (Please Excuse My Dear Aunt Sally). Using parentheses allows you to change that calculation order.
Types of operators. There are four different types of calculation operators: arithmetic, comparison, text concatenation, and reference.

Arithmetic operators
To perform basic mathematical operations, such as addition, subtraction, multiplication, or division; combine numbers; and produce numeric results, use the following arithmetic operators.
Arithmetic operator
Meaning
Example
+ (plus sign)
Addition
=3+3
– (minus sign)
Subtraction
Negation=3–3
=3* (asterisk)
Multiplication
=3*3
/ (forward slash)
Division
=3/3
% (percent sign)
Percent
30%
^ (caret)
Exponentiation
=3^3

Comparison operators
You can compare two values with the following operators. When two values are compared by using these operators, the result is a logical value—either TRUE or FALSE.
Comparison operator
Meaning
Example
= (equal sign)
Equal to
=A1=B1
> (greater than sign)
Greater than
=A1>B1
< (less than sign)
Less than
=A1<B1
>= (greater than or equal to sign)
Greater than or equal to
=A1>=B1
<= (less than or equal to sign)
Less than or equal to
=A1<=B1
<> (not equal to sign)
Not equal to
=A1<>B1

Text concatenation operator
Use the ampersand (&) to concatenate (join) one or more text strings to produce a single piece of text.
Text operator
Meaning
Example
& (ampersand)
Connects, or concatenates, two values to produce one continuous text value
="North"&"wind" results in "Northwind".
Where A1 holds "Last name" and B1 holds "First name", =A1&", "&B1 results in "Last name, First name". 
Reference operators
Combine ranges of cells for calculations with the following operators.
Reference operator
Meaning
Example
: (colon)
Range operator, which produces one reference to all the cells between two references, including the two references.
B5:B15
, (comma)
Union operator, which combines multiple references into one reference
=SUM(B5:B15,D5:D15)
(space)
Intersection operator, which produces one reference to cells common to the two references
B7:D7 C6:C8
The order in which Excel performs operations in formulas
In some cases, the order in which a calculation is performed can affect the return value of the formula, so it's important to understand how the order is determined and how you can change the order to obtain the results you want.

Calculation order
Formulas calculate values in a specific order. A formula in Excel always begins with an equal sign (=). Excel interprets the characters that follow the equal sign as a formula. Following the equal sign are the elements to be calculated (the operands), such as constants or cell references. These are separated by calculation operators. Excel calculates the formula from left to right, according to a specific order for each operator in the formula.

Operator precedence in Excel formulas
If you combine several operators in a single formula, Excel performs the operations in the order shown in the following table. If a formula contains operators with the same precedence—for example, if a formula contains both a multiplication and division operator—Excel evaluates the operators from left to right.
Operator
Description
: (colon)
(single space)
, (comma)
Reference operators
–
Negation (as in –1)
%
Percent
^
Exponentiation
* and /
Multiplication and division
+ and –
Addition and subtraction
&
Connects two strings of text (concatenation)
=
< >
<=
>=
<>Comparison

Using parentheses in Excel formulas
To change the order of evaluation, enclose in parentheses the part of the formula to be calculated first. For example, the following formula produces 11 because Excel performs multiplication before addition. The formula multiplies 2 by 3 and then adds 5 to the result.
=5+2*3
In contrast, if you use parentheses to change the syntax, Excel adds 5 and 2 together and then multiplies the result by 3 to produce 21.
=(5+2)*3
In the following example, the parentheses that enclose the first part of the formula force Excel to calculate B4+25 first and then divide the result by the sum of the values in cells D5, E5, and F5.
=(B4+25)/SUM(D5:F5)
Using functions and nested functions in Excel formulas
Functions are predefined formulas that perform calculations by using specific values, called arguments, in a particular order, or structure. Functions can be used to perform simple or complex calculations. You can find all of Excel's functions on the Formulas tab on the Ribbon:

Excel function syntax
The following example of the ROUND function rounding off a number in cell A10 illustrates a function's syntax.
1. Structure. The structure of a function begins with an equal sign (=), followed by the function name, an opening parenthesis, the arguments for the function separated by commas, and a closing parenthesis.
2. Function name. For a list of available functions, click a cell and press SHIFT+F3, which will launch the Insert Function dialog.
3. Arguments. Arguments can be numbers, text, logical values such as TRUE or FALSE, arrays, error values such as #N/A, or cell references. The argument you designate must produce a valid value for that argument. Arguments can also be constants, formulas, or other functions.
4. Argument tooltip. A tooltip with the syntax and arguments appears as you type the function. For example, type =ROUND( and the tooltip appears. Tooltips appear only for builtin functions.
Note: You don't need to type functions in all caps, like =ROUND, as Excel will automatically capitalize the function name for you once you press enter. If you misspell a function name, like =SUME(A1:A10) instead of =SUM(A1:A10), then Excel will return a #NAME? error.

Entering Excel functions
When you create a formula that contains a function, you can use the Insert Function dialog box to help you enter worksheet functions. Once you select a function from the Insert Function dialog Excel will launch a function wizard, which displays the name of the function, each of its arguments, a description of the function and each argument, the current result of the function, and the current result of the entire formula.
To make it easier to create and edit formulas and minimize typing and syntax errors, use Formula AutoComplete. After you type an = (equal sign) and beginning letters of a function, Excel displays a dynamic dropdown list of valid functions, arguments, and names that match those letters. You can then select one from the dropdown list and Excel will enter it for you.

Nesting Excel functions
In certain cases, you may need to use a function as one of the arguments of another function. For example, the following formula uses a nested AVERAGE function and compares the result with the value 50.
1. The AVERAGE and SUM functions are nested within the IF function.
Valid returns When a nested function is used as an argument, the nested function must return the same type of value that the argument uses. For example, if the argument returns a TRUE or FALSE value, the nested function must return a TRUE or FALSE value. If the function doesn't, Excel displays a #VALUE! error value.
Nesting level limits A formula can contain up to seven levels of nested functions. When one function (we'll call this Function B) is used as an argument in another function (we'll call this Function A), Function B acts as a secondlevel function. For example, the AVERAGE function and the SUM function are both secondlevel functions if they are used as arguments of the IF function. A function nested within the nested AVERAGE function is then a thirdlevel function, and so on.
Using references in Excel formulas
A reference identifies a cell or a range of cells on a worksheet, and tells Excel where to look for the values or data you want to use in a formula. You can use references to use data contained in different parts of a worksheet in one formula or use the value from one cell in several formulas. You can also refer to cells on other sheets in the same workbook, and to other workbooks. References to cells in other workbooks are called links or external references.

The A1 reference style
By default, Excel uses the A1 reference style, which refers to columns with letters (A through XFD, for a total of 16,384 columns) and refers to rows with numbers (1 through 1,048,576). These letters and numbers are called row and column headings. To refer to a cell, enter the column letter followed by the row number. For example, B2 refers to the cell at the intersection of column B and row 2.
To refer to
Use
The cell in column A and row 10
A10
The range of cells in column A and rows 10 through 20
A10:A20
The range of cells in row 15 and columns B through E
B15:E15
All cells in row 5
5:5
All cells in rows 5 through 10
5:10
All cells in column H
H:H
All cells in columns H through J
H:J
The range of cells in columns A through E and rows 10 through 20
A10:E20

Making a reference to a cell or a range of cells on another worksheet in the same workbook
In the following example, the AVERAGE function calculates the average value for the range B1:B10 on the worksheet named Marketing in the same workbook.
1. Refers to the worksheet named Marketing
2. Refers to the range of cells from B1 to B10
3. The exclamation point (!) Separates the worksheet reference from the cell range reference
Note: If the referenced worksheet has spaces or numbers in it, then you need to add apostrophes (') before and after the worksheet name, like ='123'!A1 or ='January Revenue'!A1.

The difference between absolute, relative and mixed references

Relative references A relative cell reference in a formula, such as A1, is based on the relative position of the cell that contains the formula and the cell the reference refers to. If the position of the cell that contains the formula changes, the reference is changed. If you copy or fill the formula across rows or down columns, the reference automatically adjusts. By default, new formulas use relative references. For example, if you copy or fill a relative reference in cell B2 to cell B3, it automatically adjusts from =A1 to =A2.
Copied formula with relative reference

Absolute references An absolute cell reference in a formula, such as $A$1, always refer to a cell in a specific location. If the position of the cell that contains the formula changes, the absolute reference remains the same. If you copy or fill the formula across rows or down columns, the absolute reference does not adjust. By default, new formulas use relative references, so you may need to switch them to absolute references. For example, if you copy or fill an absolute reference in cell B2 to cell B3, it stays the same in both cells: =$A$1.
Copied formula with absolute reference

Mixed references A mixed reference has either an absolute column and relative row, or absolute row and relative column. An absolute column reference takes the form $A1, $B1, and so on. An absolute row reference takes the form A$1, B$1, and so on. If the position of the cell that contains the formula changes, the relative reference is changed, and the absolute reference does not change. If you copy or fill the formula across rows or down columns, the relative reference automatically adjusts, and the absolute reference does not adjust. For example, if you copy or fill a mixed reference from cell A2 to B3, it adjusts from =A$1 to =B$1.
Copied formula with mixed reference


The 3D reference style
Conveniently referencing multiple worksheets If you want to analyze data in the same cell or range of cells on multiple worksheets within a workbook, use a 3D reference. A 3D reference includes the cell or range reference, preceded by a range of worksheet names. Excel uses any worksheets stored between the starting and ending names of the reference. For example, =SUM(Sheet2:Sheet13!B5) adds all the values contained in cell B5 on all the worksheets between and including Sheet 2 and Sheet 13.

You can use 3D references to refer to cells on other sheets, to define names, and to create formulas by using the following functions: SUM, AVERAGE, AVERAGEA, COUNT, COUNTA, MAX, MAXA, MIN, MINA, PRODUCT, STDEV.P, STDEV.S, STDEVA, STDEVPA, VAR.P, VAR.S, VARA, and VARPA.

3D references cannot be used in array formulas.

3D references cannot be used with the intersection operator (a single space) or in formulas that use implicit intersection.
What occurs when you move, copy, insert, or delete worksheets The following examples explain what happens when you move, copy, insert, or delete worksheets that are included in a 3D reference. The examples use the formula =SUM(Sheet2:Sheet6!A2:A5) to add cells A2 through A5 on worksheets 2 through 6.

Insert or copy If you insert or copy sheets between Sheet2 and Sheet6 (the endpoints in this example), Excel includes all values in cells A2 through A5 from the added sheets in the calculations.

Delete If you delete sheets between Sheet2 and Sheet6, Excel removes their values from the calculation.

Move If you move sheets from between Sheet2 and Sheet6 to a location outside the referenced sheet range, Excel removes their values from the calculation.

Move an endpoint If you move Sheet2 or Sheet6 to another location in the same workbook, Excel adjusts the calculation to accommodate the new range of sheets between them.

Delete an endpoint If you delete Sheet2 or Sheet6, Excel adjusts the calculation to accommodate the range of sheets between them.


The R1C1 reference style
You can also use a reference style where both the rows and the columns on the worksheet are numbered. The R1C1 reference style is useful for computing row and column positions in macros. In the R1C1 style, Excel indicates the location of a cell with an "R" followed by a row number and a "C" followed by a column number.
Reference
Meaning
R[2]C
A relative reference to the cell two rows up and in the same column
R[2]C[2]
A relative reference to the cell two rows down and two columns to the right
R2C2
An absolute reference to the cell in the second row and in the second column
R[1]
A relative reference to the entire row above the active cell
R
An absolute reference to the current row
When you record a macro, Excel records some commands by using the R1C1 reference style. For example, if you record a command, such as clicking the AutoSum button to insert a formula that adds a range of cells, Excel records the formula by using R1C1 style, not A1 style, references.
You can turn the R1C1 reference style on or off by setting or clearing the R1C1 reference style check box under the Working with formulas section in the Formulas category of the Options dialog box. To display this dialog box, click the File tab.
Using names in Excel formulas
You can create defined names to represent cells, ranges of cells, formulas, constants, or Excel tables. A name is a meaningful shorthand that makes it easier to understand the purpose of a cell reference, constant, formula, or table, each of which may be difficult to comprehend at first glance. The following information shows common examples of names and how using them in formulas can improve clarity and make formulas easier to understand.
Example 1
Example type 
Example, using ranges instead of names 
Example, using names 
Reference 
=SUM(A16:A20) 
=SUM(Sales) 
Constant 
=PRODUCT(A12,9.5%) 
=PRODUCT(Price,TaxRate) 
Formula 
=TEXT(VLOOKUP(MAX(A16,A20),A16:B20,2,FALSE),"m/dd/yyyy") 
=TEXT(VLOOKUP(MAX(Sales),SalesInfo,2,FALSE),"m/dd/yyyy") 
Table 
A22:B25 
=PRODUCT(Price,Table1[@Tax Rate]) 
Example 2
Copy the example data in the following table, and paste it in cell A1 of a new Excel worksheet. For formulas to show results, select them, press F2, and then press Enter. If you need to, you can adjust the column widths to see all the data.
Note: In the formulas in columns C and D, the defined name "Sales" is substituted for the reference to (range) A9:A13 and the name "SalesInfo" is substituted for the range A9:B13. If you don't create these names in your test workbook, then the formulas in D2:D3 will return the #NAME? error.
Example type 
Example, not using a name 
Example, using a name 
Formula and result, using a name 
Reference 
'=SUM(A9:A13) 
'=SUM(Sales) 
=SUM(Sales) 
Formula 
'=TEXT(VLOOKUP(MAX(A9:13),A9:B13,2,FALSE),"m/dd/yyyy") 
'=TEXT(VLOOKUP(MAX(Sales),SalesInfo,2,FALSE),"m/dd/yyyy") 
=TEXT(VLOOKUP(MAX(Sales),SalesInfo,2,FALSE),"m/dd/yyyy") 
Price 

$995 

Sales 
Sale Date 

$249 
3/17/2011 

$399 
4/2/2011 

$643 
4/23/2011 

$275 
4/30/2011 

$447 
5/4/2011 

Types of names
There are several types of names that you can create and use.

Defined name A name that represents a cell, range of cells, formula, or constant value. You can create your own defined name. Also, Excel sometimes creates a defined name for you, such as when you set a print area.

Table name A name for an Excel table, which is a collection of data about a particular subject that is stored in records (rows) and fields (columns). Excel creates a default Excel table name of "Table1", "Table2", and so on, each time you insert an Excel table, but you can change these names to make them more meaningful.
For more information about Excel tables, see Using structured references with Excel tables.


Creating and entering names
You create a name by using the:

Name box on the formula bar This is best used for creating a workbook level name for a selected range.

Create a name from selection You can conveniently create names from existing row and column labels by using a selection of cells in the worksheet.

New Name dialog box This is best used for when you want more flexibility in creating names, such as specifying a local worksheet level scope or creating a name comment.
Note: By default, names use absolute cell references.
You can enter a name by:

Typing Typing the name, for example, as an argument to a formula.

Using Formula AutoComplete Use the Formula AutoComplete dropdown list, where valid names are automatically listed for you.

Selecting from the Use in Formula command Select a defined name from a list available from the Use in Formula command in the Defined Names group on the Formula tab.

For more information, see Define and use names in formulas.
Using array formulas and array constants in Excel
An array formula can perform multiple calculations and then return either a single result or multiple results. Array formulas act on two or more sets of values known as array arguments. Each array argument must have the same number of rows and columns. You create array formulas in the same way that you create other formulas, except you press CTRL+SHIFT+ENTER to enter the formula. Some of the builtin functions are array formulas, and must be entered as arrays to get the correct results.
Array constants can be used in place of references when you don't want to enter each constant value in a separate cell on the worksheet.
Using an array formula to calculate single and multiple results
Note: When you enter an array formula, Excel automatically inserts the formula between { } (braces). If you try to enter the braces yourself, Excel will display your formula as text.

Array formula that produces a single result This type of array formula can simplify a worksheet model by replacing several different formulas with a single array formula.
For example, the following calculates the total value of an array of stock prices and shares, without using a row of cells to calculate and display the individual values for each stock.
When you enter the formula ={SUM(B2:D2*B3:D3)} as an array formula, it multiples the Shares and Price for each stock, and then adds the results of those calculations together.

Array formula that produces multiple results Some worksheet functions return arrays of values, or require an array of values as an argument. To calculate multiple results with an array formula, you must enter the array into a range of cells that has the same number of rows and columns as the array arguments.
For example, given a series of three sales figures (in column B) for a series of three months (in column A), the TREND function determines the straightline values for the sales figures. To display all the results of the formula, it is entered into three cells in column C (C1:C3).
When you enter the formula =TREND(B1:B3,A1:A3) as an array formula, it produces three separate results (22196, 17079, and 11962), based on the three sales figures and the three months.
Using array constants
In an ordinary formula, you can enter a reference to a cell containing a value, or the value itself, also called a constant. Similarly, in an array formula you can enter a reference to an array, or enter the array of values contained within the cells, also called an array constant. Array formulas accept constants in the same way that nonarray formulas do, but you must enter the array constants in a certain format.
Array constants can contain numbers, text, logical values such as TRUE or FALSE, or error values such as #N/A. Different types of values can be in the same array constant — for example, {1,3,4;TRUE,FALSE,TRUE}. Numbers in array constants can be in integer, decimal, or scientific format. Text must be enclosed in double quotation marks — for example, "Tuesday".
Array constants cannot contain cell references, columns or rows of unequal length, formulas, or the special characters $ (dollar sign), parentheses, or % (percent sign).
When you format array constants, make sure you:

Enclose them in braces ( { } ).

Separate values in different columns by using commas (,). For example, to represent the values 10, 20, 30, and 40, you enter {10,20,30,40}. This array constant is known as a 1by4 array and is equivalent to a 1rowby4column reference.

Separate values in different rows by using semicolons (;). For example, to represent the values 10, 20, 30, and 40 in one row and 50, 60, 70, and 80 in the row immediately below, you enter a 2by4 array constant: {10,20,30,40;50,60,70,80}.
Delete a formula
When you delete a formula, the resulting values of the formula is also deleted. However, you can remove just the formula and leave the resulting value of the formula displayed in the cell.

To delete formulas along with their resulting values, do the following:

Select the cell or range of cells that contains the formula.

Press DELETE.


To delete formulas without removing their resulting values, do the following:

Select the cell or range of cells that contains the formula.
If the formula is an array formula, select the range of cells that contains the array formula.
How to select a range of cells that contains the array formula

Click a cell in the array formula.

On the Home tab, in the Editing group, click Find & Select, and then click Go To.

Click Special.

Click Current array.


On the Home tab, in the Clipboard group, click Copy .
Keyboard shortcut You can also press CTRL+C. 
On the Home tab, in the Clipboard group, click the arrow below Paste , and then click Paste Values.

Avoid common errors when creating formulas
The following table summarizes some of the most common mistakes you can make when entering a formula and how to avoid formula errors:
Make sure that you… 
More information 
Match all open and close parentheses in the formula 
All parentheses are part of a matching pair in formulas. When you create a formula, Excel displays parentheses in color as they are entered. 
Use a colon to indicate a range you enter in the formula 
Colons (:) are used to separate the reference to the first and last cell in the range. For example, A1:A5. 
Enter all required arguments 
Functions can have required and optional arguments (indicated by square brackets in the syntax). All required arguments should be entered. Also, make sure that you have not entered too many arguments. 
Do not nest more than 64 functions in a formula 
Nesting functions within a formula is limited to 64 levels. 
Enclose workbook or worksheet names in single quotation marks 
When referring to values or cells on other worksheets or workbooks that have nonalphabetical characters in their names, the names must be enclosed in single quotation marks ( ' ). 
Include the path to external workbooks 
External references must contain a workbook name and the path to the workbook. 
Enter numbers without formatting 
Numbers you enter in a formula should not be formatted with decimal separators or dollar signs ($) because commas are already used as argument separators in formulas, and dollar signs are used to mark absolute references. For example, instead of entering $1,000, enter 1000 in the formula. 
Important: The calculated results of formulas and some Excel worksheet functions may differ slightly between a Windows PC using x86 or x8664 architecture and a Windows RT PC using ARM architecture. Learn more about the differences.
Do you have a specific function question?
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See also
Find and correct errors in formulas
Excel keyboard shortcuts and function keys