What You'll Learn

  • Why every formula starts with an equals sign
  • The difference between typing a number and referencing a cell
  • The four basic math operators in Excel
  • How to use parentheses to control order of operations

A formula is anything in a cell that starts with =. Once you type the equals sign, Excel knows you're about to calculate something rather than just type text.

=4+7

That formula displays 11 in the cell — but the real power comes from referencing other cells instead of typing numbers directly:

=A1+A2

This adds whatever is in cell A1 to whatever is in cell A2. If either of those cells changes later, the formula automatically recalculates. That's the entire point of using cell references instead of typed numbers — your formulas stay correct even as your data changes.

The Four Basic Operators

  • + for addition
  • - for subtraction
  • * for multiplication
  • / for division

Excel follows standard order of operations (multiplication and division before addition and subtraction), so use parentheses when you want to force a different order, e.g. =(A1+A2)*B1.

Common Mistakes

  • Forgetting the equals sign, so Excel treats the entry as plain text instead of a formula
  • Typing numbers directly into formulas instead of referencing the cells that contain them

Practice Exercise

In cells A1 and A2, enter any two numbers. In A3, write a formula that adds them using cell references, not typed numbers.

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Key Takeaways

  • A formula always starts with =
  • Reference cells instead of typing numbers so formulas stay accurate as data changes
  • Parentheses control the order calculations happen in