What is function formula in excel

Formulas and functions are the building blocks of working with numeric data in Excel. This article introduces you to formulas and functions.

In this article, we will cover the following topics.

• What is Formulas in Excel?
• Mistakes to avoid when working with formulas in Excel
• What is Function in Excel?
• The importance of functions
• Common functions
• Numeric Functions
• String functions
• Date Time functions
• V Lookup function

Tutorials Data

For this tutorial, we will work with the following datasets.

Home supplies budget

House Building Project Schedule

=A2 * D2 / 2

HERE,

• "=" tells Excel that this is a formula, and it should evaluate it.
• "A2" * D2" makes reference to cell addresses A2 and D2 then multiplies the values found in these cell addresses.
• "/" is the division arithmetic operator
• "2" is a discrete value

Formulas practical exercise

We will work with the sample data for the home budget to calculate the subtotal.

• Create a new workbook in Excel
• Enter the data shown in the home supplies budget above.
• Your worksheet should look as follows.

We will now write the formula that calculates the subtotal

Set the focus to cell E4

Enter the following formula.

=C4*D4

HERE,

• "C4*D4" uses the arithmetic operator multiplication (*) to multiply the value of the cell address C4 and D4.

Press enter key

You will get the following result

The following animated image shows you how to auto select cell address and apply the same formula to other rows.

Mistakes to avoid when working with formulas in Excel

1. Remember the rules of Brackets of Division, Multiplication, Addition, & Subtraction (BODMAS). This means expressions are brackets are evaluated first. For arithmetic operators, the division is evaluated first followed by multiplication then addition and subtraction is the last one to be evaluated. Using this rule, we can rewrite the above formula as =(A2 * D2) / 2. This will ensure that A2 and D2 are first evaluated then divided by two.
2. Excel spreadsheet formulas usually work with numeric data; you can take advantage of data validation to specify the type of data that should be accepted by a cell i.e. numbers only.
3. To ensure that you are working with the correct cell addresses referenced in the formulas, you can press F2 on the keyboard. This will highlight the cell addresses used in the formula, and you can cross check to ensure they are the desired cell addresses.
4. When you are working with many rows, you can use serial numbers for all the rows and have a record count at the bottom of the sheet. You should compare the serial number count with the record total to ensure that your formulas included all the rows.

Check Out
Top 10 Excel Spreadsheet Formulas

= E4 + E5 + E6 + E7 + E8

With a function, you would write the above formula as

=SUM (E4:E8)

As you can see from the above function used to get the sum of a range of cells, it is much more efficient to use a function to get the sum than using the formula which will have to reference a lot of cells.

Common functions

Let’s look at some of the most commonly used functions in ms excel formulas. We will start with statistical functions.

Numeric Functions

As the name suggests, these functions operate on numeric data. The following table shows some of the common numeric functions.

String functions

These basic excel functions are used to manipulate text data. The following table shows some of the common string functions.

Date Time Functions

These functions are used to manipulate date values. The following table shows some of the common date functions

VLOOKUP function

The VLOOKUP function is used to perform a vertical look up in the left most column and return a value in the same row from a column that you specify. Let’s explain this in a layman’s language. The home supplies budget has a serial number column that uniquely identifies each item in the budget. Suppose you have the item serial number, and you would like to know the item description, you can use the VLOOKUP function. Here is how the VLOOKUP function would work.

=VLOOKUP (C12, A4:B8, 2, FALSE)

HERE,

• "=VLOOKUP" calls the vertical lookup function
• "C12" specifies the value to be looked up in the left most column
• "A4:B8" specifies the table array with the data
• "2" specifies the column number with the row value to be returned by the VLOOKUP function
• "FALSE," tells the VLOOKUP function that we are looking for an exact match of the supplied look up value

The animated image below shows this in action

Download the above Excel Code

Summary

Excel allows you to manipulate the data using formulas and/or functions. Functions are generally more productive compared to writing formulas. Functions are also more accurate compared to formulas because the margin of making mistakes is very minimum.

Here is a list of important Excel Formula and Function

• SUM function = =SUM(E4:E8)

• MIN function = =MIN(E4:E8)

• MAX function = =MAX(E4:E8)

• AVERAGE function = =AVERAGE(E4:E8)

• COUNT function = =COUNT(E4:E8)

• DAYS function = =DAYS(D4,C4)

• VLOOKUP function = =VLOOKUP (C12, A4:B8, 2, FALSE)

• DATE function = =DATE(2020,2,4)

Formulas and functions are the bread and butter of Excel. They drive almost everything interesting and useful you will ever do in a spreadsheet. This article introduces the basic concepts you need to know to be proficient with formulas in Excel. More examples here.

What is a formula?

A formula in Excel is an expression that returns a specific result. For example:

=1+2 // returns 3

=6/3 // returns 2

Note: all formulas in Excel must begin with an equals sign (=).

Cell references

In the examples above, values are «hardcoded». That means results won’t change unless you edit the formula again and change a value manually. Generally, this is considered bad form, because it hides information and makes it harder to maintain a spreadsheet.

Instead, use cell references so values can be changed at any time. In the screen below, C1 contains the following formula:

=A1+A2+A3 // returns 9

Notice because we are using cell references for A1, A2, and A3, these values can be changed at any time and C1 will still show an accurate result.

All formulas return a result

All formulas in Excel return a result, even when the result is an error. Below a formula is used to calculate percent change. The formula returns a correct result in D2 and D3, but returns a #DIV/0! error in D4, because B4 is empty:

There are different ways of handling errors. In this case, you could provide the missing value in B4, or «catch» the error with the IFERROR function and display a more friendly message (or nothing at all).

Copy and paste formulas

The beauty of cell references is that they automatically update when a formula is copied to a new location. This means you don’t need to enter the same basic formula again and again. In the screen below, the formula in E1 has been copied to the clipboard with Control + C:

Below: formula pasted to cell E2 with Control + V. Notice cell references have changed:

Same formula pasted to E3. Cell addresses are updated again:

Relative and absolute references

The cell references above are called relative references. This means the reference is relative to the cell it lives in.  The formula in E1 above is:

=B1+C1+D1 // formula in E1

Literally, this means «cell 3 columns left «+ «cell 2 columns left» + «cell 1 column left». That’s why, when the formula is copied down to cell E2, it continues to work in the same way.

Relative references are extremely useful, but there are times when you don’t want a cell reference to change. A cell reference that won’t change when copied is called an absolute reference. To make a reference absolute, use the dollar symbol ($):

=A1 // relative reference
=$A$1 // absolute reference

For example, in the screen below, we want to multiply each value in column D by 10, which is entered in A1. By using an absolute reference for A1, we «lock» that reference so it won’t change when the formula is copied to E2 and E3:

Here are the final formulas in E1, E2, and E3:

=D1*$A$1 // formula in E1
=D2*$A$1 // formula in E2
=D3*$A$1 // formula in E3

Notice the reference to D1 updates when the formula is copied, but the reference to A1 never changes. Now we can easily change the value in A1, and all three formulas recalculate. Below the value in A1 has changed from 10 to 12:

This simple example also shows why it doesn’t make sense to hardcode values into a formula. By storing the value in A1 in one place, and referring to A1 with an absolute reference, the value can be changed at any time and all associated formulas will update instantly.

Tip: you can toggle between relative and absolute syntax with the F4 key.

How to enter a formula

To enter a formula:

1. Select a cell
2. Enter an equals sign (=)
3. Type the formula, and press enter.

Instead of typing cell references, you can point and click, as seen below. Note references are color-coded:

All formulas in Excel must begin with an equals sign (=). No equals sign, no formula:

How to change a formula

To edit a formula, you have 3 options:

1. Select the cell, edit in the formula bar
2. Double-click the cell, edit directly
3. Select the cell, press F2, edit directly

No matter which option you use, press Enter to confirm changes when done. If you want to cancel, and leave the formula unchanged, click the Escape key.

Video: 20 tips for entering formulas

What is a function?

Working in Excel, you will hear the words «formula» and «function» used frequently, sometimes interchangeably. They are closely related, but not exactly the same. Technically, a formula is any expression that begins with an equals sign (=).

A function, on the other hand, is a formula with a special name and purpose. In most cases, functions have names that reflect their intended use. For example, you probably know the SUM function already, which returns the sum of given references:

=SUM(1,2,3) // returns 6
=SUM(A1:A3) // returns A1+A2+A3

The AVERAGE function, as you would expect, returns the average of given references:

=AVERAGE(1,2,3) // returns 2

And the MIN and MAX functions return minimum and maximum values, respectively:

=MIN(1,2,3) // returns 1
=MAX(1,2,3) // returns 3

Excel contains hundreds of specific functions. To get started, see 101 Key Excel functions.

Function arguments

Most functions require inputs to return a result. These inputs are called «arguments». A function’s arguments appear after the function name, inside parentheses, separated by commas.  All functions require a matching opening and closing parentheses (). The pattern looks like this:

=FUNCTIONNAME(argument1,argument2,argument3)

For example, the COUNTIF function counts cells that meet criteria, and takes two arguments, range and criteria:

=COUNTIF(range,criteria) // two arguments

In the screen below, range is A1:A5 and criteria is «red». The formula in C1 is:

=COUNTIF(A1:A5,"red") // returns 2

Video: How to use the COUNTIF function

Not all arguments are required. Arguments shown in square brackets are optional. For example, the YEARFRAC function returns fractional number of years between a start date and end date and takes 3 arguments:

=YEARFRAC(start_date,end_date,[basis])

Start_date and end_date are required arguments, basis is an optional argument. See below for an example of how to use YEARFRAC to calculate current age based on birthdate.

How to enter a function

If you know the name of the function, just start typing. Here are the steps:

1. Enter equals sign (=) and start typing. Excel will make a list of matching functions based as you type:

When you see the function you want in the list, use the arrow keys to select (or just keep typing).

2. Type the Tab key to accept a function. Excel will complete the function:

3. Fill in required arguments:

4. Press Enter to confirm formula:

Combining functions (nesting)

Many Excel formulas use more than one function, and functions can be «nested» inside each other. For example, below we have a birthdate in B1 and we want to calculate current age in B2:

The YEARFRAC function will calculate years with a start date and end date:

We can use B1 for start date, then use the TODAY function to supply the end date:

When we press Enter to confirm, we get current age based on today’s date:

=YEARFRAC(B1,TODAY())

Notice we are using the TODAY function to feed an end date to the YEARFRAC function. In other words, the TODAY function can be nested inside the YEARFRAC function to provide the end date argument. We can take the formula one step further and use the INT function to chop off the decimal value:

=INT(YEARFRAC(B1,TODAY()))

Here, the original YEARFRAC formula returns 20.4 to the INT function, and the INT function returns a final result of 20.

Notes:

1. The current date in images above is February 22, 2019.
2. Nested IF functions are a classic example of nesting functions. 
3. The TODAY function is a rare Excel function with no required arguments.

Key takeaway: The output of any formula or function can be fed directly into another formula or function. 

Math Operators

The table below shows the standard math operators available in Excel:

Logical operators

Logical operators provide support for comparisons such as «greater than», «less than», etc. The logical operators available in Excel are shown in the table below:

Video: How to build logical formulas

Order of operations

When solving a formula, Excel follows a sequence called «order of operations». First, any expressions in parentheses are evaluated. Next Excel will solve for any exponents. After exponents, Excel will perform multiplication and division, then addition and subtraction. If the formula involves concatenation, this will happen after standard math operations. Finally, Excel will evaluate logical operators, if present.

1. Parentheses
2. Exponents
3. Multiplication and Division
4. Addition and Subtraction
5. Concatenation
6. Logical operators

Tip: you can use the Evaluate feature to watch Excel solve formulas step-by-step.

Convert formulas to values

Sometimes you want to get rid of formulas, and leave only values in their place. The easiest way to do this in Excel is to copy the formula, then paste, using Paste Special > Values. This overwrites the formulas with the values they return. You can use a keyboard shortcut for pasting values, or use the Paste menu on the Home tab on the ribbon.

Video: Paste Special Shortcuts

What’s next?

Below are guides to help you learn more about Excel’s formulas and functions. We also offer online video training.

• 29 tips for working with formulas and functions (video version here)
• 500 formula examples with full explanations
• 101 important Excel functions
• Guide to all Excel functions (work in progress)
• Excel formula errors (examples and fixes)
• Formula criteria — 50 examples
• Formulas for conditional formatting
• How to use F9 to debug a formula (video)
• Excel formula errors and fixes (video)