Difference Between Formula and Function in Excel

Jun 24, 2025

—

by

Let’s break down the difference between a Formula and a Function in Excel in simple terms, and include detailed examples to make it clear.

Feature	Formula	Function
Definition	A formula is a user-defined expression to perform calculations.	A function is a built-in Excel operation used within formulas.
Who creates it?	Created manually by the user	Provided by Excel
Complexity	Can be simple or complex	Often simplifies complex calculations
Starts with	Always starts with `=`	Always used inside a formula that starts with `=`
Examples	`=A1 + A2=B2*C2-100`	`=SUM(A1:A5)=IF(A1>50, "Pass", "Fail")`

🔍 What is a Formula?

A formula is any user-created expression that performs a calculation or operation. It can include values, cell references, operators, and functions.

✅ Examples of Formulas:

=A1 + A2
➤ Adds the values in cells A1 and A2.
=B2 * 10 + C2
➤ Multiplies B2 by 10, then adds C2.
=SUM(A1:A5) - D1
➤ Uses a function (SUM) within a formula.

💡 All functions are part of formulas, but not all formulas include functions.

🔍 What is a Function?

A function is a predefined operation in Excel that performs a specific task, such as adding numbers, checking conditions, or working with text and dates.

Functions save time and make complex calculations easier.

✅ Common Excel Functions:

Function	Description	Example
`SUM()`	Adds a range of numbers	`=SUM(A1:A5)`
`AVERAGE()`	Finds the mean of values	`=AVERAGE(B1:B5)`
`IF()`	Performs a logical test	`=IF(A1>50, "Pass", "Fail")`
`VLOOKUP()`	Looks up a value in a table	`=VLOOKUP(101, A2:C10, 2, FALSE)`
`LEN()`	Counts characters in a cell	`=LEN("Excel")` returns `5`

🧠 Formula vs Function – A Simple Analogy

Think of a formula like a full sentence:
➤ “I added two numbers and subtracted 5.”
Think of a function like a word or tool used in that sentence:
➤ “added” is like the SUM() function.

✅ Summary

Formula	Function
Made by the user	Built-in by Excel
Can contain operators, values, cell references, and functions	Used inside formulas
More flexible but manual	Easier and more efficient