What Is Excel? Definition and Overview

Microsoft Excel Definition

Excel is a powerful spreadsheet program developed by Microsoft that enables users to organize, analyze, and visualize data. Used across industries, Microsoft Excel is part of the Microsoft Office suite and supports a wide range of functions, including calculations, automation, and financial analysis.

At its core, Excel is defined as a tool that structures data into rows and columns, allowing users to perform mathematical operations, create charts, and build financial models. Excel is available on Microsoft Windows and macOS, and it is widely used for both personal and professional tasks.

What is Excel Used For?

Excel is typically used to organize data and perform financial analysis.  It is used across all business functions and at companies from small to large.

Microsoft Excel is a spreadsheet program used to calculate data, organize information, and perform detailed analysis across both personal and professional settings. This incredibly powerful tool supports a wide range of tasks, including:

• Data entry and organization: Store and structure information in rows and columns for easy access and updates.
• Accounting and bookkeeping: Track expenses, income, and balances with Excel templates and formulas.
• Financial modeling and forecasting: Build projections, budget models, and what-if financial analyses.
• Creating charts and visualizations: Turn raw data into line graphs, bar charts, and dashboards.
• Automating tasks with Excel macros: Use recorded or written scripts to perform repetitive actions instantly.
• Advanced calculations with built-in functions: Apply formulas like SUM, AVERAGE, IF, and XLOOKUP to analyze values.
• Managing large datasets with Pivot Tables: Summarize, filter, and reorganize data for insights.
• Time tracking and project management: Plan, schedule, and monitor tasks across a timeline.
• Budgeting and personal finance management: Track spending, set goals, and organize financial priorities.
• Customer and sales tracking (CRM functions): Use Excel as a lightweight CRM for managing contacts and performance.

Key Features and Functions of Excel

Excel’s robust feature set includes tools for:

• Formulas and Functions: Perform everything from simple math to complex statistical analysis using functions like XLOOKUP, IF, and INDEX/MATCH.
• Data Analysis: Use Pivot Tables and charts to summarize and visualize data.
• Automation: Excel macros help automate repetitive tasks, improving efficiency.
• Formatting Tools: Customize cell formats, styles, and tables to improve readability.
• Add-ins: Extend Excel’s capabilities through integrations and additional tools.

To input formulas in Excel, start with an equal sign (=). Excel also supports operators like the plus sign (+), minus sign (-), and forward slash (/) to perform calculations.

Data Functions, Formulas, and Shortcuts

The Excel software program includes many functions, formulas, and shortcuts that can be used to enhance its functionality.

We have defined the key functions and formulas below in our Excel guide:

• Free Guide: Excel Shortcuts, Functions, and Definitions

Excel Use Cases in Finance and Accounting

In the world of finance and accounting, Microsoft Excel is the backbone of everyday operations. Professionals rely on Excel not just for basic number-crunching, but for robust, high-stakes data analysis and financial reporting.

Here’s how Excel is used across financial roles:

• Building complex financial models: From discounted cash flow (DCF) models to scenario analysis, Excel allows users to simulate real-world business decisions.
• Analyzing financial statements: Quickly review and compare income statements, balance sheets, and cash flow statements to evaluate company performance.
• Budgeting and forecasting: Excel is the primary tool for creating dynamic budget models and financial forecasts.
• Tracking KPIs and financial metrics: Monitor key performance indicators in real-time using dashboards, charts, and conditional formatting.

Excel’s flexibility, scalability, and ability to handle large datasets make it the default software for accounting teams and financial analysts. With its wide array of formulas, pivot tables, and automation tools, it remains one of the most powerful tools for financial modeling available today.

While Excel is defined as a “data” management tool, the data that is most commonly managed is financial. At CFI, we would define Excel as the ultimate financial software. While there are other financial software tools tailored to specific tasks, the strongest point about Excel is its robustness and openness. Excel models are as powerful as the analyst makes them.

Accountants, investment bankers, analysts, and individuals in various financial career paths rely on Excel to perform their daily job functions.

Additional Resources

Thank you for reading CFI’s guide to Microsoft Excel. To keep learning and developing your career, these additional CFI resources will be helpful:

Keyboard Shortcuts

Advanced Formulas in Excel

Financial Modeling

See all Excel resources

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FAQs: Excel Definition and Use

What is the simple definition of Excel?

Microsoft Excel is a spreadsheet program designed to organize, calculate, and analyze data. It uses a grid of rows and columns to help users work with numbers, formulas, and text efficiently.

What is Microsoft Excel mainly used for?

Excel is primarily used for tasks like budgeting, data entry, financial modeling, data visualization, and reporting. Businesses use it to manage and make sense of large amounts of data, while individuals use it for personal finances and planning.

Is Excel part of Microsoft Office?

Yes. Excel is one of the core programs included in Microsoft Office, alongside Word, PowerPoint, and Outlook. It is also available through Microsoft 365 and accessible via desktop and cloud-based applications.

What are Excel macros used for?

Macros in Excel are used to automate repetitive tasks. With a few lines of code or by recording your actions, you can reduce manual work and improve workflow accuracy — especially useful for advanced users working with recurring reports or data formatting.

What makes Excel so powerful?

Excel’s power lies in its flexibility and depth. It supports hundreds of built-in functions, allows for the creation of custom formulas, handles large datasets, and integrates with other tools. Whether you’re creating a basic budget or a complex financial model, Excel adapts to the task — making it indispensable for data professionals and business users alike.