How would you define a formula in the context of Excel?

In the context of Excel, a formula is defined as an equation that performs calculations on data within the spreadsheet. Formulas can combine numbers, cell references, functions, and operators to compute results. For example, a simple formula like =A1 + B1 adds the values in cells A1 and B1 together. Formulas can also perform more complex calculations involving functions such as SUM, AVERAGE, or IF, allowing users to manipulate and analyze data efficiently.

The role of formulas in Excel is crucial because they enable dynamic calculation; when the values referenced in a formula change, the result automatically updates to reflect those changes. This capability significantly enhances data analysis and reporting capabilities within Excel, making it an essential tool for users working with numerical data.