What Are Functions in Excel? | Excel Functions Explained for Beginners

Discover what functions in Microsoft Excel are, how they work, and why they’re essential for efficient data analysis. Learn Excel basics with clear examples for beginners..

What Are Functions?

Functions are predefined formulas that perform calculations by using specific values, called arguments, in a particular order, or structure. These functions help you perform calculations, analyze data, and automate tasks quickly. (Microsoft Support)

How Do Functions Work?

Functions follow a specific structure:

1. Function Name – The type of calculation you want to perform (e.g., SUM, AVERAGE).
2. Opening Parenthesis ( – Starts the function’s arguments.
3. Arguments – The inputs the function needs to work. These can be:
   • Numbers
   • Text
   • Cell references (e.g., A1, B2:B10)
   • Other functions (called nested functions)
4. Closing Parenthesis ) – Ends the function.

Example:

=SUM(A1:A5)

• SUM → Function name
• (A1:A5) → Argument (adds values from cells A1 to A5)

Nested Functions

You can use a function inside another function for more complex calculations.

Example:
=AVERAGE(SUM(B2:B5), C2)

• First, SUM(B2:B5) adds the values in B2 to B5.
• Then, AVERAGE calculates the mean of that sum and cell C2.

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