Tutorial – How to make calculations in Excel

Performing a calculation in Excel

To tell Excel that you want to perform a calculation, start by typing the = symbol.

  • This way, Excel will understand that it needs to perform a calculation.
  • Without the = sign, Excel interprets your writing as text.

In the following example:

  1. In C3, we perform a calculation but only see the result. Cell D3 shows the formula written in C3, i.e. =1+2, and the result, 3.
  2. In C5, we also wrote 1+2 but without the = sign, so for Excel it's just text, and the calculation isn't performed.
Start a calculation with the equal sign

Simple operations

Excel is extremely simple to use, which is one reason it's so popular 😉.

As we just saw, all you need to do is start with the = sign, then write your operation using the following operators:

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

Here are a few examples:

Result with the different mathematical operators

As you can see, the order of the numbers matters for some operators:

  • Subtraction and Division: the order of the numbers is important to avoid errors
  • Addition and Multiplication: the order of the numbers has no impact on the result

Worked example: which operator comes first?

What is the result of the following calculation?

Question result of the calculation

Mathematical priorities

In mathematics, however, operators don't all have the same "weight". In order of priority:

  1. Exponent (or Power)
  2. Multiplication and Division
  3. Addition and Subtraction

In other words:

  • The exponent will always be calculated first.
  • Then comes the multiplication or division calculation.
  • Finally, addition or subtraction.
Calculation with different mathematical prior

For the first calculation, why is the result 20?

  1. First, the multiplication is calculated, i.e. 5*2 = 10.
  2. Then the addition: 10 (the previous result) + 10 = 20.

For the second calculation:

  1. First, the multiplication is calculated, i.e. 5*2 = 10.
  2. Then the addition: 20 - 10 + 20 = 30.

Using parentheses

However, you can override the order of operations by using parentheses.

When part of a calculation is enclosed in parentheses, that part is computed first.

Calculation with parentheses

In example 3:

  • First, 20/5 = 4 is calculated.
  • Then 5*5 = 25.
  • And finally 4+25 = 29.

In example 4:

  • First, the bracketed calculation 5+5 = 10 is done.
  • Then the division 20/10 = 2.
  • Then 2*5 = 10.

As you can see, the result can be completely different if you use or omit parentheses in your calculations.

Using cell references

The real advantage of doing calculations in Excel is that you can build formulas using cell references. This way, Excel knows to use the cell's contents in the calculation.

For example, to calculate the total including VAT, you add the total excluding VAT and the VAT amount:

  1. Enter the = sign.
  2. Select cell C2 using the mouse or the keyboard arrow keys.
  3. Add the + sign.
  4. Select cell C3.
  5. Confirm with the Enter key.
Write formula with cell references

The formula bar shows =C2+C3, but the cell displays 240 (200 + 40).

What happens when you change one value?

In this example, the tax amount and the total price both depend on the price excluding tax:

  • =C2*0.2 — the tax amount
Amount of tax
  • =C2+C3 — the total price
Formula using references

Now, if we change the initial price in C2:

Excel recalculates the formulas automatically

As you can see, Excel immediately recalculates the results in C3 and C4.

THAT'S WHAT EXCEL IS ALL ABOUT

When the value of a cell is changed, all the formulas linked to that cell are updated immediately 😀👍.

Now practice it yourself

Time to put these arithmetic operators to work: build your own formulas with +, -, * and /, and see how operator priority and parentheses change the result.

Simple operations

Track a half-year of revenue, costs and profit with basic arithmetic formulas across a small activity table — 7 guided steps.

Divide the annual costs by the number of months in a year.

1 / 7

The total fixed costs for the year are 9000. In B3, how do you write the formula to calculate the fixed costs to pay in January?

Write a formula that always picks up February's amount.

2 / 7

In D4, March's variable costs follow February's. How do you write the formula?

3 / 7

April's variable costs are March's plus 1000.

4 / 7

May's variable costs are three times higher than February's.

5 / 7

June's variable costs are three times higher than February's, plus half of January's variable costs.

It's the sum of fixed costs and variable costs.

6 / 7

In B5, what is the formula to calculate January's total costs?

The difference between the revenue figure and total costs.

7 / 7

In B6, what is the formula for January's operating result — the difference between revenue and expenses?

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