What is the advantage of using cell references in formulas compared to entering constant values?

Answer Details

A cell reference (such as B4 or A1) points to the value held in a specific spreadsheet cell rather than requiring that value to be typed directly into a formula. When a formula is built from cell references, it always reads whatever value is currently in those cells, so it recalculates automatically whenever the source data changes.

The practical advantage of this is accuracy: most spreadsheet errors happen when the same number has to be typed into several different formulas by hand, since it is easy to mistype a digit or to forget to update every copy of a value when it changes. Using cell references means a value only ever needs to be entered once, and every formula referencing that cell stays correct automatically, which reduces the amount of manual data entry and the errors that come with it. This is the opposite of making formulas less flexible, more complex, or something only needed for complicated multi-function formulas; cell references make even simple formulas more reliable.

Examination reminder: the core benefit of a cell reference over a constant value is fewer manual entries and therefore fewer transcription errors, not just convenience or complexity.