Most Excel fans don’t turn to the world’s leading spreadsheet software just to create nicely formatted tables. Instead, they rely on Excel’s industrial-strength computing muscle, which lets you reduce reams of numbers to neat subtotals and averages. Performing these calculations is the first step to extracting meaningful information out of raw data.

Excel provides a number of different ways to build formulas, letting you craft them by hand or point-and-click them into existence. In this chapter, you’ll learn about all of these techniques. You’ll start by examining the basic ingredients that make up any formula, and then take a close look at the rules Excel uses when evaluating a formula.

First things first: what exactly do formulas do in Excel? A
*formula* is a series of mathematical instructions that you place in
a cell in order to perform some kind of calculation. These instructions may be as simple
as telling Excel to sum up a column of numbers, or they may incorporate advanced
statistical functions to spot trends and make predictions. But in all cases, all formulas
share the same basic characteristics:

You enter each formula into a single cell.

Excel calculates the result of a formula every time you open a spreadsheet or change the data a formula uses.

Formula results are usually numbers, although you can create formulas that have text or Boolean (true or false) results.

To view any formula (for example, to gain some insight ...

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