Application software packages are grouped into categories based on the main type of task they are built to perform: word processing for creating and editing text documents, graphics packages for drawing and image editing, database management packages for organising structured records, and spreadsheet packages for arranging data in rows and columns to perform calculations.
Microsoft Excel's core design is built around a grid of rows and columns, where each cell can hold text, numbers, or formulas. Its main strengths are performing calculations, applying formulas across ranges of cells, sorting and filtering numerical data, and generating charts from that data, which are all defining features of a spreadsheet package.
It is not primarily built for composing and formatting long text documents (which is the role of word processing software like Microsoft Word), nor is it centred on drawing and image manipulation (the role of graphics packages), nor does it manage large structured databases with relationships between tables the way dedicated database management packages such as Microsoft Access do.
Exam tip: whenever a program's identity centres on rows, columns, and formula-driven calculations, it belongs to the spreadsheet package category, regardless of any secondary features it might also offer.