How Excel Formulas Work
A formula starts with = and can contain functions, cell references, constants and operators. Excel recalculates formulas when referenced values change. citeturn477179search0turn477179search10
What is an Excel Formula?
Excel formulas calculate values or perform actions in worksheet cells. Every formula starts with =.
Formula / Example
Result / Explanation — Let’s Understand It
Cell References
Use cell references instead of hard-coded values so a formula updates when the source cells change.
Formula / Example
Result / Explanation — Let’s Understand It
Range References
A range such as A1:A10 lets a formula work across multiple cells.
Formula / Example
Result / Explanation — Let’s Understand It
Relative References
Relative references change when a formula is copied to another cell.
Formula / Example
Result / Explanation — Let’s Understand It
Absolute References
Use $ to lock a row, column, or both when copying formulas.
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Result / Explanation — Let’s Understand It
Mixed References
Lock only the row or column when that is what the formula design requires.
Formula / Example
Result / Explanation — Let’s Understand It
Arithmetic Operators
Use +, -, *, / and ^ for calculations.
Formula / Example
Result / Explanation — Let’s Understand It
SUM and AVERAGE
SUM totals values; AVERAGE returns the arithmetic mean.
Formula / Example
Result / Explanation — Let’s Understand It
MIN, MAX and MEDIAN
Find the smallest, largest, and middle value of a dataset.
Formula / Example
Result / Explanation — Let’s Understand It
COUNT Family
COUNT counts numbers, COUNTA counts non-empty cells, and COUNTBLANK counts blank cells.
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Result / Explanation — Let’s Understand It
ROUND Family
ROUND, ROUNDUP, and ROUNDDOWN control numeric rounding.
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Result / Explanation — Let’s Understand It
ABS, MOD and QUOTIENT
Use ABS for absolute value, MOD for a remainder, and QUOTIENT for integer division.
Formula / Example
Result / Explanation — Let’s Understand It
SUMIF and SUMIFS
Add values that meet one or multiple conditions.
Formula / Example
Result / Explanation — Let’s Understand It
COUNTIF and COUNTIFS
Count values that meet one or multiple criteria.
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Result / Explanation — Let’s Understand It
AVERAGEIF and AVERAGEIFS
Average values meeting one or multiple conditions.
Formula / Example
Result / Explanation — Let’s Understand It
IF
IF returns one value when a condition is TRUE and another when it is FALSE.
Formula / Example
Result / Explanation — Let’s Understand It
IFS and SWITCH
IFS handles ordered conditions; SWITCH is useful when matching an expression to cases.
Formula / Example
Result / Explanation — Let’s Understand It
AND, OR and NOT
Combine logical tests with AND, OR, and NOT.
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IFERROR and IFNA
Replace error results with a controlled message or value.
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Text Cleaning
TRIM removes extra spaces; CLEAN removes many non-printing characters.
Formula / Example
Result / Explanation — Let’s Understand It
Text Case
UPPER, LOWER, and PROPER adjust text case.
Formula / Example
Result / Explanation — Let’s Understand It
LEFT, RIGHT and MID
Extract text from the left, right, or middle of a cell.
Formula / Example
Result / Explanation — Let’s Understand It
FIND and SEARCH
FIND is case-sensitive; SEARCH is generally case-insensitive.
Formula / Example
Result / Explanation — Let’s Understand It
CONCAT and TEXTJOIN
Combine text from cells and ranges.
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Result / Explanation — Let’s Understand It
SUBSTITUTE and REPLACE
Replace matching text or characters at specific positions.
Formula / Example
Result / Explanation — Let’s Understand It
TEXT Formatting
Convert values into formatted text.
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Result / Explanation — Let’s Understand It
TODAY, NOW and DATE
Work with current dates/times and construct dates.
Formula / Example
Result / Explanation — Let’s Understand It
YEAR, MONTH, DAY and WEEKDAY
Extract components from dates.
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EDATE and EOMONTH
Move dates by months or calculate month-end dates.
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NETWORKDAYS and WORKDAY
Calculate workdays and workday-based dates.
Formula / Example
Result / Explanation — Let’s Understand It
XLOOKUP
XLOOKUP searches a range/array and returns a corresponding value. Microsoft documents exact matching as the default.
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Result / Explanation — Let’s Understand It
VLOOKUP and HLOOKUP
Traditional lookup functions search a table vertically or horizontally.
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Result / Explanation — Let’s Understand It
INDEX and MATCH
Combine INDEX and MATCH for flexible lookup patterns.
Formula / Example
Result / Explanation — Let’s Understand It
XMATCH and CHOOSE
XMATCH returns a match position; CHOOSE returns a value by index.
Formula / Example
Result / Explanation — Let’s Understand It
FILTER
FILTER returns rows that meet one or more criteria and spills the result into neighboring cells.
Formula / Example
Result / Explanation — Let’s Understand It
SORT, SORTBY and UNIQUE
Sort or deduplicate dynamic arrays.
Formula / Example
Result / Explanation — Let’s Understand It
SEQUENCE, TAKE and DROP
Generate sequences and select or remove rows/columns from arrays.
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LET
LET assigns names to intermediate results, improving readability and potentially avoiding repeated calculation.
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LAMBDA
LAMBDA creates reusable custom functions without VBA or JavaScript.
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Result / Explanation — Let’s Understand It
BYROW, BYCOL, MAP, REDUCE and SCAN
Modern array helpers can calculate per row/column, transform arrays, or accumulate values.
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PMT and FV
Financial functions can calculate loan payments and future values.
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PV, NPV, IRR and XIRR
Evaluate present value and investment returns.
Formula / Example
Result / Explanation — Let’s Understand It
Statistical Functions
Use STDEV, VAR, PERCENTILE, and RANK to summarize and compare data.
Formula / Example
Result / Explanation — Let’s Understand It
Error and Information Functions
Test cell content and errors with ISBLANK, ISNUMBER, ISTEXT, ISERROR, and ISNA.
Formula / Example
Result / Explanation — Let’s Understand It
SUMPRODUCT
SUMPRODUCT multiplies corresponding array values and then sums the products; it is useful for weighted totals.
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Result / Explanation — Let’s Understand It
Dynamic Array Combination
Combine FILTER, SORT, UNIQUE and other array functions to build dynamic reports.
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Result / Explanation — Let’s Understand It
Lookup + Error Handling
Combine XLOOKUP with IFNA/IFERROR for user-friendly lookups.
Formula / Example
Result / Explanation — Let’s Understand It
LET + Multiple Calculations
Use LET when the same expression appears several times.
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Result / Explanation — Let’s Understand It
LAMBDA Custom Tax Function
Build reusable custom business logic.
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Result / Explanation — Let’s Understand It
Mini Project: Student Result
Combine IF, AVERAGE, COUNTIF, XLOOKUP, and TEXT to build a small student report.
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Result / Explanation — Let’s Understand It
Mini Project: Sales Dashboard
Combine SUMIFS, COUNTIFS, XLOOKUP, FILTER, SORT, and TEXT for an interactive sales summary.
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Result / Explanation — Let’s Understand It
Mini Project: Loan Calculator
Combine PMT, IF, ROUND, and TEXT for a learner-friendly EMI/payment worksheet.
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Result / Explanation — Let’s Understand It
Mini Project: Attendance
Use COUNTIF/COUNTIFS and IF to calculate attendance status.
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Result / Explanation — Let’s Understand It
Final Formula Challenge
Build a formula from smaller formulas. Break complex tasks into named steps with LET.
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Result / Explanation — Let’s Understand It
Formula Library
Search the practical formula library below. Availability varies by Excel version; modern functions are marked in the course lessons.
| Category | Function | Purpose |
|---|---|---|
| Math & Basic | SUM | Adds numbers. |
| Math & Basic | SUMIF | Sums with one condition. |
| Math & Basic | SUMIFS | Sums with multiple conditions. |
| Math & Basic | AVERAGE | Arithmetic mean. |
| Math & Basic | AVERAGEIF | Conditional average. |
| Math & Basic | AVERAGEIFS | Multi-condition average. |
| Math & Basic | MIN | Smallest value. |
| Math & Basic | MAX | Largest value. |
| Math & Basic | MEDIAN | Middle value. |
| Math & Basic | COUNT | Counts numeric cells. |
| Math & Basic | COUNTA | Counts non-empty cells. |
| Math & Basic | COUNTBLANK | Counts blanks. |
| Math & Basic | COUNTIF | Counts one condition. |
| Math & Basic | COUNTIFS | Counts multiple conditions. |
| Math & Basic | ROUND | Rounds to a specified number of digits. |
| Math & Basic | ROUNDUP | Rounds away from zero. |
| Math & Basic | ROUNDDOWN | Rounds toward zero. |
| Math & Basic | INT | Rounds down to integer. |
| Math & Basic | ABS | Absolute value. |
| Math & Basic | MOD | Remainder after division. |
| Math & Basic | QUOTIENT | Integer portion of division. |
| Math & Basic | PRODUCT | Multiplies values. |
| Math & Basic | SUMPRODUCT | Weighted/multi-array multiplication and sum. |
| Math & Basic | POWER | Raises to a power. |
| Math & Basic | SQRT | Square root. |
| Math & Basic | RAND | Random decimal. |
| Math & Basic | RANDBETWEEN | Random integer. |
| Logical | IF | Conditional result. |
| Logical | IFS | Multiple ordered conditions. |
| Logical | AND | TRUE if all conditions are true. |
| Logical | OR | TRUE if any condition is true. |
| Logical | NOT | Reverses a logical value. |
| Logical | IFERROR | Replacement for any error. |
| Logical | IFNA | Replacement for #N/A. |
| Logical | SWITCH | Matches an expression to cases. |
| Text | LEFT | Text from left. |
| Text | RIGHT | Text from right. |
| Text | MID | Text from middle. |
| Text | LEN | Character count. |
| Text | TRIM | Removes extra spaces. |
| Text | CLEAN | Removes non-printing characters. |
| Text | UPPER | Uppercase. |
| Text | LOWER | Lowercase. |
| Text | PROPER | Capitalizes words. |
| Text | CONCAT | Combines text. |
| Text | TEXTJOIN | Combines text with delimiter. |
| Text | TEXT | Formats value as text. |
| Text | SUBSTITUTE | Replaces matching text. |
| Text | REPLACE | Replaces by position. |
| Text | FIND | Case-sensitive search. |
| Text | SEARCH | Case-insensitive search. |
| Text | EXACT | Case-sensitive comparison. |
| Text | CHAR | Character from code. |
| Text | CODE | Code of first character. |
| Date & Time | TODAY | Current date. |
| Date & Time | NOW | Current date/time. |
| Date & Time | DATE | Creates date. |
| Date & Time | YEAR | Extracts year. |
| Date & Time | MONTH | Extracts month. |
| Date & Time | DAY | Extracts day. |
| Date & Time | WEEKDAY | Day-of-week number. |
| Date & Time | WEEKNUM | Week number. |
| Date & Time | EDATE | Moves by months. |
| Date & Time | EOMONTH | Month-end date. |
| Date & Time | DATEDIF | Date difference. |
| Date & Time | NETWORKDAYS | Working days. |
| Date & Time | WORKDAY | Date after working days. |
| Lookup & Reference | XLOOKUP | Modern lookup. |
| Lookup & Reference | VLOOKUP | Vertical lookup. |
| Lookup & Reference | HLOOKUP | Horizontal lookup. |
| Lookup & Reference | INDEX | Returns value by position. |
| Lookup & Reference | MATCH | Returns match position. |
| Lookup & Reference | XMATCH | Modern match. |
| Lookup & Reference | CHOOSE | Value by index. |
| Lookup & Reference | OFFSET | Shifted reference. |
| Lookup & Reference | INDIRECT | Text-to-reference. |
| Dynamic Arrays | FILTER | Returns rows meeting criteria. |
| Dynamic Arrays | SORT | Sorts an array. |
| Dynamic Arrays | SORTBY | Sorts by another array. |
| Dynamic Arrays | UNIQUE | Returns unique values. |
| Dynamic Arrays | SEQUENCE | Generates sequences. |
| Dynamic Arrays | TRANSPOSE | Switches rows and columns. |
| Dynamic Arrays | TAKE | Returns selected leading/trailing rows/columns. |
| Dynamic Arrays | DROP | Drops leading/trailing rows/columns. |
| Dynamic Arrays | CHOOSECOLS | Selects columns. |
| Dynamic Arrays | CHOOSEROWS | Selects rows. |
| Dynamic Arrays | TOCOL | Flattens to a column. |
| Dynamic Arrays | TOROW | Flattens to a row. |
| Advanced | LET | Names intermediate calculations. |
| Advanced | LAMBDA | Creates reusable custom functions. |
| Advanced | BYROW | Calculates per row. |
| Advanced | BYCOL | Calculates per column. |
| Advanced | MAP | Transforms array items. |
| Advanced | REDUCE | Accumulates to one result. |
| Advanced | SCAN | Returns intermediate accumulations. |
| Financial | PMT | Periodic payment. |
| Financial | FV | Future value. |
| Financial | PV | Present value. |
| Financial | NPV | Net present value. |
| Financial | IRR | Internal rate of return. |
| Financial | XIRR | IRR with irregular dates. |
| Statistical | STDEV.S | Sample standard deviation. |
| Statistical | STDEV.P | Population standard deviation. |
| Statistical | VAR.S | Sample variance. |
| Statistical | PERCENTILE.INC | Inclusive percentile. |
| Statistical | RANK.EQ | Ranks a value. |
| Information & Errors | ISBLANK | Tests blank. |
| Information & Errors | ISNUMBER | Tests numeric type. |
| Information & Errors | ISTEXT | Tests text type. |
| Information & Errors | ISERROR | Tests error. |
| Information & Errors | ISNA | Tests #N/A. |
| Database | DSUM | Database conditional sum. |
| Database | DCOUNT | Database conditional count. |
| Engineering | CONVERT | Unit conversion. |
| Engineering | DEC2BIN | Decimal to binary. |
| Engineering | HEX2DEC | Hexadecimal to decimal. |
Excel Formula Knowledge Check
Question 1
What character begins an Excel formula?
Question 2
Which function is the modern lookup example in this course?
Question 3
Which function returns unique values?
Question 4
Which function can create a reusable custom Excel function?
Question 5
Which function can name intermediate calculations inside one formula?
Microsoft Excel Formula Documentation
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