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## Excel Tip – Understanding The Dollar Sign In An Excel Formula

You know that formulas refer to cells by specifying a cell reference, for example A1 and B2.

There are three types of cell references that cannot be used in Excel – relative, absolute and compound.

**relative cell reference**. With these types of cell references, when you copy or move a formula to a cell other than the one in which the formula is entered, the cell references change relative to their new position.

The row and column parts of the formula are not preceded by a $ sign. For example, A1 is a relative reference to cell A1. If moved or copied, the reference changes by the same number of rows and columns as it was moved. So, if you move the relative reference A1 one cell down and one cell to the right, the reference changes to B2. We know that this kind of behavior is very useful and it allows a formula to be copied up or down the page and automatically refer to the new column or row that it finds itself in.

For example if we have a column with a formula in D3=SUM(B3:C3) we can drag the formula in D3 down the column to D10 and add all the relative row data down to row 10 really quickly.

**Absolute cell reference**– In some situations you want the cell reference to be constant or called absolute. This is where $ is used. A good example of this is if we have a constant value for the VAT rate, we can store the VAT rate value in a cell, say G2 and then reference that cell in our formula. A general formula looks like this –

=A2*$G$2 where A2 is the selling price and G2 includes the VAT rate.

The $ signs around both rows and columns ensure that even if we drag the formula by row or column, the VAT rate reference remains the same ie absolute.

**mixed context **– These are exactly that – either column or row fixed mixtures. A classic example of this type of pf context is a time table where we want each cell to be the product of its row and column headings. Suppose the table starts at column A and row 1.

In cell B2, the formula without the dollar would be A2*B1, but for this formula to work when copying to each column, we must always look at column A for the first reference and to work for each row, we always need to. See line 1 for the second reference. Using the dollar sign to do this, it becomes =$A3*B$1. It can be dragged for the entire schedule and Excel will automatically fill it in correctly.

Remember A quick way to enter the $ sign is to press the F$ key while entering the formula. Repeatedly hitting the F4 key toggles between no dollar signs, both dollar signs, only rows and only columns.

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