By BPM Financial Modelling

What is an Excel "Formula"?

What is a Formula?
"An equation that performs calculations on values in a worksheet."

What can a Formula Contain? - Example Function Operators

=SUM(B2:B15)+A23^2
What can a Formula Contain?
A formula can contain any or all of the following types of values: (a) Functions: (b) Operators: (c) References: (d) Constants: Predefined formulas that perform calculations by using specific values / arguments in a particular order (e.g. SUM, IF, AND, MAX). Symbols that designate a type of calculation to perform on elements of a formula (e.g. +, <, =, /). Identifiers for a cell or range of cells in a worksheet that tells Excel where to locate values (e.g. B12, C2:C25, G3, A1:D40). Values that are not calculated in a worksheet (e.g. 6.23, 183, apple, 10/9/2008). References Constant

A formula can contain up to 1,056 characters including functions, operators, references and / or constants There are more than 300 functions, 15 operators, 16,777,216 references (per worksheet) and an infinite number of constants that can be used in combination within a formula As such, there is an infinite number of possible formulae that can be created using Excel

What is the Structure of a Formula?

There are three simple rules that need to be adhered to when creating a formula, as follows: (a) A formula must start with an equal sign (=) as the first entry in the Formula Bar. (b) A formula that contains an "Open bracket", must also contain a corresponding "Close bracket" (unless the bracket is part of a text string). (c) A comma in a formula must be located within a function that requires the comma (unless the comma is part of a text string).

What are the Constraints on Formulae in Excel?

(a) A single formula in Excel can not contain more than 1,056 characters. (b) Excel stores and calculates values with 15 digits of precision (e.g. a number entered as 1.23456789123456789123456789 will be stored by Excel as 1.23456789123457).

Some Formula Examples:

Functions & References =SUM(B12,F18,E13) =IF(B12>D34,C8,C9) =MAX(SUM(A2:A13),E35,B12) =SUM(B2,MIN(B14,B15),MAX(C22,C23)) Operators & References =B12+F18*E13 =C54/C55-D3*(D4+D5) =E12^B5<C13/B9 =B16<>Y9 Functions, References, Operators & Constants =MAX(B12/B13,10%,E13-5) =IF(B12>(D34-50%),IF(H12=10,15/F4,MIN(C14,C15,C16))) =AND(SUM(A2:A7)<>0,E35>E36,B12/2=1) =IF(ISERROR(SUM(B2:B37)+14/E9,H19),H19,SUM(B2:B37))

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