# Create a formula

Formulas (formula: A sequence of values, cell references, names, functions, or operators in a cell that together produce a new value. A formula always begins with an equal sign (=).) are equations that perform calculations on values in your worksheet. A formula always starts with an equal sign (**=**).

You can create a simple formula by using constants (constant: A value that is not calculated. For example, the number 210 and the text "Quarterly Earnings" are constants. An expression, or a value resulting from an expression, is not a constant.) and calculation operators (operator: A sign or symbol that specifies the type of calculation to perform within an expression. There are mathematical, comparison, logical, and reference operators.). Simple formulas can include values you enter, cell references, or names you have defined. For example, **=A1+A2** or **=5+2** are simple formulas that add the values in cells A1 and A2 or the values that you specify.

You can also create a formula by using a function (function: A prewritten formula that takes a value or values, performs an operation, and returns a value or values. Use functions to simplify and shorten formulas on a worksheet, especially those that perform lengthy or complex calculations.). For example, the formulas **=****SUM(****A1:A2)** and **SUM(A1,A2)** both use the **SUM** function to add the values in cells A1 and A2. In addition to formulas that use a single function, you can create formulas with nested functions or arrays (array: Used to build single formulas that produce multiple results or that operate on a group of arguments that are arranged in rows and columns. An array range shares a common formula; an array constant is a group of constants used as an argument.) that calculate single or multiple results.

** Note ** This article provides procedures for creating different formulas. For examples of formulas, see Examples of commonly used formulas. For more information about deleting or removing formulas, see Delete or remove a formula.

- Learn about the parts of a formula
- Create a simple formula by using constants and calculation operators
- Create a formula by using cell references and names
- Create a formula by using a function
- Create a formula by using nested functions
- Create an array formula that calculates a single result
- Create an array formula that calculates multiple results
- Learn tips and tricks about creating formulas
- Avoid common errors when creating formulas

## Learn about the parts of a formula

Depending on the type of formula that you create, a formula can contain any or all of the following parts:

**Functions**A function, such as

**PI(**

**)**, starts with an equal sign (

**=**), and you can enter arguments (argument: The values that a function uses to perform operations or calculations. The type of argument a function uses is specific to the function. Common arguments that are used within functions include numbers, text, cell references, and names.) for the function within its parentheses. Each function has a specific argument syntax.

**Cell references**You can refer to data in worksheet cells by including cell references in the formula. For example, the cell reference

**A2**returns the value of that cell or uses that value in the calculation.

**Constants**You can also enter constants, such as numbers (such as

**2**) or text values, directly into a formula.

**Operators**Operators are the symbols that are used to specify the type of calculation that you want the formula to perform. For example, the

**^**(caret) operator raises a number to a power, and the

*****(asterisk) operator multiplies numbers.

## Create a simple formula by using constants and calculation operators

- Click the cell in which you want to enter the formula.
- Type
**=**(equal sign). - To enter the formula, do one of the following:
- Type the constants and operators that you want to use in the calculation.

Example formula |
What it does |
---|---|

=5+2 | Adds 5 and 2 |

=5-2 | Subtracts 2 from 5 |

=5/2 | Divides 5 by 2 |

=5*2 | Multiplies 5 times 2 |

=5^2 | Raises 5 to the 2nd power |

- Click the cell that contains the value that you want to use in the formula, type the operator that you want to use, and then click another cell that contains a value.

Example formula |
What it does |
---|---|

=A1+A2 | Adds the values in cells A1 and A2 |

=A1-A2 | Subtracts the value in cell A2 from the value in A1 |

=A1/A2 | Divides the value in cell A1 by the value in A2 |

=A1*A2 | Multiplies the value in cell A1 times the value in A2 |

=A1^A2 | Raises the value in cell A1 to the exponential value specified in A2 |

- Press ENTER.

Tips

- You can enter as many constants and operators as you need to achieve the calculation result that you want.
- Excel follows the standard order of mathematical operations. For example, the formula
**=5+2*3**, multiplies two numbers and then adds a number to the result – the multiplication operation (2*3) is performed first, and then 5 is added to its result.

## Create a formula by using cell references and names

The example formulas at the end of this section contain relative references (relative reference: In a formula, the address of a cell based on the relative position of the cell that contains the formula and the cell referred to. If you copy the formula, the reference automatically adjusts. A relative reference takes the form A1.) to and names (name: A word or string of characters that represents a cell, range of cells, formula, or constant value. Use easy-to-understand names, such as Products, to refer to hard to understand ranges, such as Sales!C20:C30.) of other cells. The cell that contains the formula is known as a dependent cell when its value depends on the values in other cells. For example, cell B2 is a dependent cell if it contains the formula **=C2**.

- Click the cell in which you want to enter the formula.
- In the formula bar (formula bar: A bar at the top of the Excel window that you use to enter or edit values or formulas in cells or charts. Displays the constant value or formula stored in the active cell.) , type
**=**(equal sign). - Do one of the following:
- To create a reference, select a cell, a range of cells, a location in another worksheet, or a location in another workbook. This behavior is called semi-selection. You can drag the border of the cell selection to move the selection, or drag the corner of the border to expand the selection.

** Note ** If there is no square corner on a color-coded border, the reference is to a named range.

- To enter a reference to a named range, press F3, select the name in the
**Paste name**box, and click**OK**.

Example formula |
What it does |
---|---|

=C2 | Uses the value in the cell C2 |

=Sheet2!B2 | Uses the value in cell B2 on Sheet2 |

=Asset-Liability | Subtracts the value in a cell named Liability from the value in a cell named Asset |

- Press ENTER.

For more information, see Create or change a cell reference or Define and use names in formulas.

## Create a formula by using a function

- Click the cell in which you want to enter the formula.
- To start the formula with the function, click
**Insert Function**on the formula bar . - Select the function that you want to use.

You can enter a question that describes what you want to do in the **Search for a function** box (for example, "add numbers" returns the **SUM** function), or browse from the categories in the **Or Select a category** box.

** Tip ** For a list of available functions, see List of worksheet functions (alphabetical) or List of worksheet functions (by category).

- Enter the arguments.

** Tip ** To enter cell references as an argument, click **Collapse Dialog** (which temporarily hides the dialog box), select the cells on the worksheet, and then press **Expand Dialog** .

Example formula |
What it does |
---|---|

=SUM(A:A) | Adds all numbers in column A |

=AVERAGE(A1:B4) | Averages all numbers in the range |

- After you complete the formula, press ENTER.

** Tip ** To summarize values quickly, you can also use **AutoSum**. On the **Home** tab, in the **Editing** group, click **AutoSum**, and then click the function that you want.

## Create a formula by using nested functions

Nested functions use a function as one of the arguments of another function. You can nest up to 64 levels of functions. The following formula sums a set of numbers (G2:G5) only if the average of another set of numbers (F2:F5) is greater than 50. Otherwise, it returns 0.

**AVERAGE**and

**SUM**functions are nested within the

**IF**function.

- Click the cell in which you want to enter the formula.
- To start the formula with the function, click
**Function Wizard**on the formula bar . - Select the function that you want to use.

You can enter a question that describes what you want to do in the **Search for a function** box (for example, "add numbers" returns the **SUM** function), or browse from the categories in the **Or Select a category** box.

** Tip ** For a list of available functions, see List of worksheet functions (alphabetical) or List of worksheet functions (by category).

- To enter the arguments, do one or more of the following:
- To enter cell references as an argument, click
**Collapse Dialog****Expand Dialog**. - To enter another function as an argument, enter the function in the argument box that you want. For example, you can add
**SUM(****G2:G5)**in the**Value_if_true**edit box of the**IF**function. - The parts of the formula displayed in the
**Function Arguments**dialog box reflect the function that you selected in the previous step. For example, if you clicked**IF**, the**Function arguments**dialog box displays the arguments for the**IF**function.

## Create an array formula that calculates a single result

You can use an array formula (array formula: A formula that performs multiple calculations on one or more sets of values, and then returns either a single result or multiple results. Array formulas are enclosed between braces { } and are entered by pressing CTRL+SHIFT+ENTER.) to perform several calculations to generate a single result. This type of array formula can simplify a worksheet model by replacing several different formulas with a single array formula.

- Click the cell in which you want to enter the array formula.
- Enter the formula that you want to use.

** Tip ** Array formulas use standard formula syntax. They all begin with an equal sign, and you can use any of the built-in Excel functions in your array formulas.

For example, the following formula calculates the total value of an array of stock prices and shares, without using a row of cells to calculate and display the total values for each stock.

When you enter the formula **{=****SUM(****B2:C2*B3:C3)}** as an array formula, Excel multiples the number of shares by the price for each stock (500*10 and 300*15), and then adds the results of those calculations together to get a total value of 9500.

- Press CTRL+SHIFT+ENTER.

Excel automatically inserts the formula between **{ }** (a pair of opening and closing braces).

** Note ** Manually typing braces around a formula will not convert it into an array formula — you must press CTRL+SHIFT+ENTER to create an array formula.

** Important ** Any time you edit the array formula, the braces (**{ }**) disappear from the array formula, and you must press CTRL+SHIFT+ENTER again to incorporate the changes into an array formula and to add the braces.

## Create an array formula that calculates multiple results

Some worksheet functions return arrays of values, or require an array of values as an argument. To calculate multiple results by using 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 have.

- Select the range of cells in which you want to enter the array formula.
- Enter the formula that you want to use.

** Tip ** Array formulas use standard formula syntax. They all begin with an equal sign, and you can use any of the built-in Excel functions in your array formulas.

For example, given a series of three sales figures (column B) for a series of three months (column A), the **TREND** function determines the straight-line values for the sales figures. To display all of 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.

- Press CTRL+SHIFT+ENTER.

Excel automatically inserts the formula between **{ }** (a pair of opening and closing braces).

** Note ** Manually typing braces around a formula will not convert it into an array formula — you must press CTRL+SHIFT+ENTER to create an array formula.

** Important ** Any time you edit the array formula, the braces (**{ }**) disappear from the array formula, and you must press CTRL+SHIFT+ENTER again to incorporate the changes into an array formula and to add the braces.

## Learn tips and tricks about creating formulas

When you work with formulas, it’s good to know how you can easily change the type of reference the formula is using, copy formulas to other cells in the worksheet, avoid formula errors by using Formula Autocomplete, and take advantage of Function Screen tips that are provided for each function to learn more about the formula arguments.

**Switch between relative, absolute, and mixed references**

To switch between relative, absolute, and mixed references:

- Select the cell that contains the formula.
- In the formula bar (formula bar: A bar at the top of the Excel window that you use to enter or edit values or formulas in cells or charts. Displays the constant value or formula stored in the active cell.) , select the reference that you want to change.
- Press F4 to switch between the reference types.

For more information about switching between reference types, see Switch between relative, absolute, and mixed references.

**Quickly copy formulas**** to other cells**

You can quickly enter the same formula into a range of cells. Select the range that you want to calculate, type the formula, and then press CTRL+ENTER. For example, if you type **=****SUM(****A1:B1)** in range C1:C5, and then press CTRL+ENTER, Excel enters the formula in each cell of the range, using A1 as a relative reference.

You can also use the **Fill** command to copy formulas into adjacent cells. For more information, see Fill data automatically in worksheet cells.

**Use Formula Autocomplete**

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, Excel displays a dynamic list of valid functions and names below the cell. After you insert the function or name into the formula by pressing TAB or double-clicking the item in the list, Excel displays any appropriate arguments. As you fill out the formula, typing a comma can also display additional arguments. You can insert additional functions or names into your formula and, as you type their beginning letters, Excel again displays a dynamic list from which you can choose.

Formula Autocomplete is on by default. To turn it on or off, see Use Formula AutoComplete.

**Use Function ScreenTips**

If you are not familiar with the arguments of a function, you can use the function ScreenTip that appears after you type the function name and an opening parenthesis. Click the function name to view the Help topic on the function, or click an argument name to select the corresponding argument in your formula.

## 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 non-alphabetical characters in their names, the names must be enclosed in single quotation marks ( ' ). |

Include the path to external workbooks |
External references (external reference: A reference to a cell or range on a sheet in another Excel workbook, or a reference to a defined name in another workbook.) 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. |