Excel Formulas

Microsoft Excel is one of the most widely used software applications in the world, particularly in the business world.

Its ability to organize and manipulate data in a tabular format has made it an essential tool for data analysis, financial modeling, and other complex calculations.

One key feature that makes Excel so powerful is its use of  VBA loops and formulas, which can help automate repetitive tasks and perform complex calculations.

How excel formulas work

Excel formulas are equations that perform a calculation on one or more values within a spreadsheet.

Formulas always begin with an equal sign (=) and may contain one or more operators, which are symbols that tell Excel what type of calculation to perform.

For example, the plus sign (+) is used to add values together, the minus sign (-) is used to subtract values, the asterisk (*) is used to multiply values, and the forward slash (/) is used to divide values.

Formulas can also include references to cells within the spreadsheet, which are indicated by their column and row coordinates, such as A1 or B3.

By referencing cells, formulas can automatically update as the values in those cells change.


Suppose we want to calculate the total cost of buying two items whose prices are listed in cells A1 and B1. We can use the formula =A1+B1 to add the values in those cells together and get the total cost.

Creating Excel Formulas

To create an Excel formula, first, select the cell where you want the result to appear.
Type the equal sign (=) to begin the formula, and then enter it, using any operators, cell references, or functions necessary to perform the calculation.

For example, to multiply the value in cell A1 by the value in cell B1, you would enter the formula =A1*B1.


Suppose we want to calculate the average of five numbers listed in cells A1 to A5. We can use the formula =AVERAGE(A1:A5) to get the average of those numbers.

Common Excel Functions

Excel functions are pre-built formulas that perform specific calculations or tasks.

Functions can be a huge time-saver for complex calculations and are often easier to use than manually typing out a long formula.

Some of the most commonly used Excel functions include:

  • SUM: Adds the values in a range of cells.
  • AVERAGE: Calculates the average value of a range of cells.
  • MIN: Returns the smallest value in a range of cells.
  • MAX: Returns the largest value in a range of cells.
  • COUNT: Counts the number of cells in a range that contain a numeric value.
  • IF: Tests a condition and returns one value if the condition is true and another if the condition is false.

Excel also includes a variety of more specialized functions for performing financial calculations, statistical analysis, and other complex tasks.


Suppose we want to count how many students in a class scored above 80 in an exam.

We can use the COUNTIF function and the formula =COUNTIF(A1:A20, “>80”) to count the number of cells in the range A1 to A20 that contain a value greater than 80.

Tips for Working with Excel Formulas

  • Always double-check your formulas to ensure they are accurate.
  • Use cell references whenever possible to ensure that your calculations update automatically when the values in those cells change.
  • Be aware of operator precedence to ensure your formulas are calculated correctly.
  • Use parentheses to clarify your formulas when in doubt.


Suppose we have the formula =10+5*2 in a cell. Since multiplication has higher operator precedence than addition, Excel will multiply 5 by 2 and then add 10, resulting in a value of 20.

However, if we want to add 10 and 5 first and then multiply the result by 2, we need to use parentheses and write the formula as = (10+5)*2, giving us a result of 30.

Excel formulas final remarks

Excel formulas are an incredibly powerful tool for performing calculations and automating data analysis. By understanding how formulas work, how to create them, and how to use functions effectively, you can save time and increase the accuracy of your work in Excel.

Remember to double-check your formulas, use cell references whenever possible, and be aware of operator precedence to ensure accurate calculations.

With practice, you’ll be able to use Excel formulas to quickly and easily perform even the most complex calculations.


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