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## Creating Excel Spreadsheet Formula Tutorial

**The formula is basic**

Formulas in Microsoft Excel begin with an equal sign. The equal sign tells Excel that the following characters form a formula. If you do not enter an equal sign, Excel will treat your entry as text and the calculation will fail.

To show how the formulas work, we’ll start with a simple exercise by selecting the blank cell A1. Then type =5+5, and press Enter. Excel calculates and produces a result of 10 in cell A1.

Note The formula bar displays the formula you just typed. What is seen in the cell is the result; What appears in the formula bar is the underlying value, which in this case is the formula.

**Order of Excel calculations**

When performing calculations in a formula, Excel follows a few rules of precedence:

Excel first calculates the expressions inside the parentheses.

Excel calculates multiplication and division before addition and subtraction.

Excel calculates consecutive operators with the same level of precedence from left to right.

For example, the formula = 10+10*2 returns 30 when Excel multiplies 10 by 2 and then adds 10. However, the formula =(10+10)*2 gives a result of 40. This is because Excel calculates. First the expression inside the parentheses (10+10). Then it is multiplied by 2.

If you are unsure of the order in which Excel will calculate, use parentheses—even if parentheses are not necessary. Brackets make your formulas easier to read.

**Reference cells in formulas**

You can include or reference other cells in a formula. When you do so, the result of the formula depends on the values in the reference cells and changes automatically when the values in the reference cells change. This is extremely powerful in what-if scenarios.

To see how this works, enter 10 in cell A1. Now select cell A2 and type =A1*2. The value in cell A2 is 20. If you change the value in cell A1 from 10 to any value, the value in cell A2 will also change. Cell references are especially useful when you create complex formulas, or perform what-if analysis.

To reference cells in your formula you can select with your pointer instead of typing. For example, to enter a formula in cell A1 that refers to A2 and A3, do the following:

- Select cell A1, and type the equals sign.
- Click in cell A2, and type the plus sign.
- Click in cell A3, and press Enter.

An active cell does not need to be visible in the current window for you to enter a value in that cell. You can reference cells anywhere; Cells in an existing worksheet, another worksheet, or even in other workbooks. You scroll through a worksheet without changing the active cell and click cells in remote areas of your worksheet, in other worksheets, or in other workbooks, as you build a formula. The formula bar displays the contents of the active cell, which area of the worksheet is currently visible.

**Relative, Absolute, and Compound Reference**

Relative references refer to cells by their position in relation to the cell containing the formula. A relative reference to cell A1, for example, looks like this: =A1.

Absolute references refer to cells by their fixed position in the worksheet. An absolute reference to cell A1 looks like this: =$A$1.

Compound reference includes relative reference and absolute reference. A compound reference to cell A1, for example, looks like this: =$A1 or =A$1.

If the dollar sign precedes the only letter such as $A1, column A is absolute, and row 1 is relative. If a dollar sign precedes a number such as A$1, column A is relative, and row 1 is absolute.

Absolute and compound references become important when you start copying formulas from one place to another. When you copy and paste, relative references are adjusted automatically, while absolute references are not. This means if you copy this formula =B$1+$B2 from cell A1 to B2. In cell B2, the formula will adjust to =B$1+$B3.

You can change reference types by pressing F4. The following steps show how:

1. Select cell A1, and type =B1+B2 (but press Enter).

2. Move the cursor to B1 and press F4 once. The formula becomes =$B$1+B2. Move the cursor to B2 and press F4 once. The formula becomes =B1+$B$2.

3. Press F4 again on B1 or B2 to change the reference to Mixed; Relative column and absolute row.

4. Press F4 again to reverse the compound reference; Absolute column and relative row.

5. Press F4 again to return to the original relative context.

Relative reference is the default. If you want to make the reference composite or absolute, use F4 to do so.

**References to other working papers**

You can reference cells in other worksheets within the same workbook just as easily as you reference cells within the same worksheet. For example, to enter a reference to cell A1 in Sheet1 to cell A2 in Sheet2, do this:

1. Select cell A1 in Sheet1, and type the equals sign.

2. Click the Sheet2 tab.

3. Click cell A2, and then press Enter.

After you press Enter, Sheet1 is now active. Select cell A2, and you’ll see that it contains the formula =Sheet2!A2.

An exclamation point separates the worksheet part of the reference from the cell part.

**References to worksheets in other workbooks**

You can reference cells in worksheets in other workbooks just as you reference cells in other worksheets within the same workbook. These references are called external references. For example, to enter a reference to Book2 in Book1, follow these steps:

1. 2 Create workbooks; Book 1 and Book 2

2. Select cell A1 in Sheet1 of Book1, and type the equals sign.

3. Switch to Book2. Click to select A2.

4. Press Enter

After you hit enter, your formula should be =[Book2]Sheet1!$A$2. This context has 3 parts: Workbook Book2 in square brackets, Worksheet and Cell. So reference cells in external workbooks by selecting the workbook, then the worksheet, and then the cell you want to reference.

Learn more about Excel spreadsheets at [http://www.tayop.net.au/ExcelTraining/tabid/59/Default.aspx]

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