Know and understand the difference between a formula and a function

20 Spreadsheets – Understanding Formulas and Functions

What is a Formula?

A formula is an expression that the spreadsheet evaluates to produce a result. It is created by the user and can contain:

• Cell references (e.g., A1, B2)
• Arithmetic operators (+, -, *, /)
• Parentheses to control the order of calculation
• Constants (numbers or text)

All formulas begin with an equals sign (=). Example:

=A1 + B1 * 2 which is equivalent to the mathematical expression $A1 + (B1 \times 2)$.

What is a Function?

A function is a predefined calculation that the spreadsheet software provides. Functions have a name, followed by arguments enclosed in parentheses. They can perform:

• Mathematical operations (e.g., SUM, A \cdot ERAGE)
• Logical tests (e.g., IF)
• Text manipulation (e.g., CONCATENATE)
• Date and time handling (e.g., NOW)

Example of a function:

=SUM(A1:A5) which adds the values in cells A1 through A5.

Key Differences Between Formulas and Functions

1. Creation: Formulas are written manually by the user; functions are built‑in tools provided by the spreadsheet.
2. Complexity: A formula can be simple or complex, but a function encapsulates a specific operation, often simplifying complex calculations.
3. Syntax: Formulas start with = and use operators directly; functions also start with = but require a name and parentheses with arguments.
4. Reusability: Functions can be reused across many worksheets without redefining the logic, whereas a formula must be copied or rewritten.
5. Error handling: Functions often include built‑in error checking (e.g., IFERROR), while formulas rely on the user to manage errors.

Examples in a Table

Type	Example	Purpose
Formula	=A2 * B2 - C2	Calculates a custom expression using cell values.
Function	=A \cdot ERAGE(D1:D10)	Finds the mean of a range of numbers.
Combined	=SUM(A1:A5) + MAX(B1:B5)	Uses two functions within one formula to add the total of A‑column to the highest value in B‑column.

When to Use Each

Use a formula when you need a unique calculation that is not covered by a built‑in function, or when you are combining several functions into a single expression.

Use a function when the required calculation is standard (e.g., sum, average, count) because it reduces the chance of errors and makes the worksheet easier to read.