What does the term "formula" refer to in a spreadsheet?

Spreadsheet software organises data in cells and offers several distinct features: charts represent data visually, cell styles control layout and appearance, and text formatting rules control how text looks. None of these performs an actual calculation on the data itself.

A formula is a predefined calculation that a spreadsheet performs automatically using the values in specified cells. For example, entering \( =A1+A2 \) adds the values in cells A1 and A2 and displays the result, and if either value changes, the result updates automatically. This is what makes spreadsheets powerful for tasks like totalling scores, calculating averages, or working out percentages without recalculating by hand.

A formula should not be confused with a function, which is a specific named calculation such as SUM or AVERAGE that can be used inside a formula; the formula itself is the broader term for any calculation built from cell references and operators.