Excel Formulas vs Functions: A Fast Beginner Guide

If you’re using Excel for data analytics, reporting, or general data work, understanding formulas, functions, and cell references is essential. These are the building blocks behind almost every spreadsheet.

What Is a Formula?

A formula is a calculation you write yourself using:

• Numbers
• Cell references
• Math operators: + - * /

All formulas start with =.

Examples:

=B2+B3
=B2-B3
=B2*B3
=B2/B3

Cell References vs Hardcoding Numbers

Avoid hardcoding:

=10+20

Use cell references:

=B2+B3

This makes your spreadsheet dynamic. When values change, the result updates automatically.

What Is a Function?

A function is a built-in formula Excel provides to simplify common calculations.

Example:

=SUM(B2:B5)

Key idea:
Every function is a formula. Not every formula is a function.

When to Use Functions

Instead of:

=B2+B3+B4+B5

Use:

=SUM(B2:B5)

Functions are cleaner, faster, and reduce errors.

Essential Excel Functions

SUM – Add values

=SUM(B2:B5)

AVERAGE – Calculate the mean

=AVERAGE(B2:B5)

MAX – Largest value

=MAX(B2:B5)

MIN – Smallest value

=MIN(B2:B5)

COUNT – Count numeric cells

=COUNT(B2:B5)

IF – Apply logic

=IF(B2>50,"Pass","Fail")

Relative vs Absolute Cell References

• B2 → Relative reference (changes when dragged)
• $B$2 → Absolute reference (stays fixed when dragged)

This matters when copying formulas across rows or columns.

Explore Excel’s Function Library

Go to Formulas → Insert Function to browse Excel’s full function library and get help building formulas.

Key Takeaways

Understand absolute vs relative references when copying formulas

Formulas start with = and use cell references

Functions are built-in formulas like SUM, IF, AVERAGE

Always reference cells instead of hardcoding numbers

Use functions to simplify calculations