What is a Formula vs Function in Excel?
A Formula is an equation designed by a user in Excel, while a Function is a predefined calculation in the spreadsheet application. This guide will walk you through a Formula vs Function in Excel so you know exactly what the similarities and differences are.
Excel allows users to perform simple calculations such as finding totals for a row or column of numbers. Formulas and functions can be useful in more complex situations, including calculating mortgage payments, solving engineering or math problems, and creating financial models.
Examples of a Formula
When a user types an equals sign in a cell, they are starting to create a formula.
Examples of a formula include:
=B7+B8-(4*2)+1 [see screenshot below]
Examples of a Function
When a user types an equals sign followed by a predefined set of letters (or clicks on the Fx button in the formula bar), a function begins to be implemented.
=AVERAGE(F4:F8) [see screenshot below]
Examples of a Formula and Function
It doesn’t just need to be a case of formula vs function. Users can combine the two to create even more powerful analysis.
Examples of the two combined are:
Formula vs Function in Practice
In common business practice, users use the terms formula and function almost interchangeably. From a communication and comprehension perspective, there’s not a big difference. Just know that technically, a function is a piece of code that executes a predefined calculation, and a formula is something you create yourself.
Thank you for reading this CFI guide to understanding Formula vs Function in Excel.
CFI is the official provider of the global Financial Modeling & Valuation Analyst (FMVA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional resources below will be useful: