What’s the difference between a Formula and a Function in Excel?
26 May, 2009
Ever been guilty of using Excel as a fancy calculator? If so, you’d be just using a formula in Excel - such as =A1+A2 or =452*12.
There are, however, pre-defined formulas in Excel such as IF, SUM, VLOOKUP, INDEX (and about 300 more!) These are referred to as functions.
So, you could write a formula containing a function eg. =MAX(A1:B20) or you could just write a simple formula which does not contain a function eg. =A1/A2.
Mastering the use of functions in formulas is a key skill in learning Financial Modelling. Happy formula-writing!
For a great discussion on writing formulas, see: http://www.finance30.com/forum/topics/creating-an-excel-formula-the . You’ll probably need to become a member of the Finance 3.0 website to view the discussion, but it’s well worth it, as the website is a very useful resource for Financial Modellers.