Goal
You’ll be able to write basic formulas using cell references, and understand why referencing cells is almost always better than typing raw numbers directly into a formula.
Learn
Every formula in Excel begins with an equals sign: =. Without it, Excel treats your entry as plain text or a number, not something to calculate.
=5+3 (a formula using raw numbers) =A1+A2 (a formula using cell references)
Both formulas above might calculate the same result, but they behave completely differently in practice. The first, using raw numbers, will always calculate exactly 8, no matter what — it’s disconnected from any actual data on the sheet. The second, referencing cells A1 and A2, automatically recalculates whenever the values in those cells change — genuinely essential for any spreadsheet meant to update dynamically as real data changes, rather than needing to be manually rewritten every time.
This is the single most important habit to build early: reference cells, don’t hardcode numbers directly into formulas, unless that specific number is a genuine constant that will truly never need to change (like the number of days in a week).
Basic arithmetic operators work as expected: + (add), - (subtract), * (multiply), / (divide). Excel follows standard order of operations (multiplication/division before addition/subtraction), and parentheses can override that order: =(A1+A2)*B1 calculates the sum first, then multiplies.
Decision Task
You write =50*3 to calculate a total, instead of referencing the actual cells containing those two numbers. Before reading on: what real problem does this create if the underlying numbers on your sheet ever change?
Show Answer
The formula would keep returning 150 forever, regardless of what the actual numbers on your sheet later become — it’s completely disconnected from the real data. You’d need to manually find and rewrite this formula every single time either number changes, rather than it automatically recalculating on its own, which is exactly what referencing the actual cells (like =A1*A2) would provide for free.
Common Mistake
Hardcoding raw numbers directly into formulas instead of referencing the cells that actually contain those values. This creates spreadsheets that don’t genuinely update when underlying data changes, defeating much of the real point of using a spreadsheet in the first place — formulas should almost always point at cells, not contain fixed numbers, unless that number is a true, permanent constant.
Practice Questions
1. Write a formula that adds the values in cells A1 and B1 together.
Show Answer
=A1+B1
2. Why does a formula always need to start with an equals sign?
Show Answer
Without it, Excel treats the entry as plain text or a literal number, not something to calculate at all.
3. Write a formula that subtracts the value in B2 from the value in A2, then multiplies the result by 2.
Show Answer
=(A2-B2)*2
4. True or False: =10+20 and =A1+A2 (where A1 contains 10 and A2 contains 20) will always behave identically in every situation.
Show Answer
False — they calculate the same initial result, but =10+20 never changes regardless of any other data, while =A1+A2 automatically updates if A1 or A2’s values change.
5. What real-world situation would make hardcoding a raw number into a formula genuinely acceptable?
Show Answer
When that number is a true, permanent constant that will never need to change — like the number of days in a week (7), not a value that represents actual changeable data.
Try It Yourself
Without looking back, write a formula that calculates the average of three cells, A1, A2, and A3, using basic arithmetic (addition and division), not a built-in function.
Show Answer
=(A1+A2+A3)/3 — adding the three cells together, then dividing by 3 to get the average, using cell references rather than hardcoded numbers.
Quick Check
1. What symbol must every Excel formula begin with?
Show Answer
An equals sign (=).
2. Why is referencing cells generally better than hardcoding raw numbers in a formula?
Show Answer
Cell references automatically recalculate when the underlying data changes; hardcoded numbers never update on their own.
3. What does the * symbol do in a formula?
Show Answer
Multiplication.
4. How can you override Excel’s default order of operations in a formula?
Show Answer
Using parentheses to group calculations that should happen first.
5. When is hardcoding a raw number into a formula genuinely acceptable?
Show Answer
When it’s a true, permanent constant that will never need to change.