As you probably know, to create an Excel formula, you begin by typing an equal sign: this distinguishes it from other types of data. A formula consists of a series of expressions. There are three key components in these expressions: arithmetic operations, such as add and subtract; Excel functions; and cell references.

To create a formula which calculates the total of two of the numbers in a spreadsheet (say 3 and 34), we could simply type “=3 34″. When we press the Enter key, we would see the correct result. However, the formula would have no link to the two cells which contain the numbers. If the data in the cells were to change, the formula would still calculate the old result.

Obviously, the solution is to ensure that our formula contains a reference to the two cells in question. The simplest way of doing this is to click on the first cell having typed “=”. Excel then automatically creates a reference to that cell. Next type the plus sign and click on the second cell. Excel creates a reference to the second cell and we then confirm the formula either by clicking on the Enter button (on the left of the formula bar) or pressing the Enter key on the keyboard.

Once your formula contains a reference to these two cells, any time the contents of the cells change, the result produced by formula will be updated.

If this were the only way of performing calculations in Excel, formulas would become very long and extremely complex. To avoid this situation, we can use Excel’s built-in functions. Functions carry out complex mathematical calculations without the user having to worry about how the result is reached.

For example, let’s say that we wanted to total the contents of a hundred different cells. If we relied purely on the plus sign, we would end up creating a formula with a hundred different arguments; in other words, a reference to each an every cell. Instead, we can simply use the SUM function.

To use a function in a formula, type “=” followed by the name of the function. Next type open brackets and enter the arguments of the function. The arguments of the function are the values required by that function in order to return a result. In the case of the SUM function, we simply need to specify which cells contain the numbers we want to total. We can do this by clicking or dragging across the cells that contain those numbers.

When you have finished entering references to all the cells containing numbers that we want to total, you can enter the formula. You don’t even need to put in the closing brackets. Excel will do this for you.

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