9/15/23, 2:40 PM Basic Excel Formulas - List of Important Formulas for Beginners

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Basic Excel Formulas

Time-saving ways to insert formulas into Excel

Written by CFI Team

Reviewed by Jeff Schmidt

Basic Excel Formulas Guide

Mastering the basic Excel formulas is critical for beginners to become
highly proficient in financial analysis. Microsoft Excel is considered the
industry standard piece of software in data analysis. Microsoft’s
spreadsheet program also happens to be one of the most preferred
software by investment bankers and financial analysts in data
processing, financial modeling, and presentation.

This guide will provide an overview and list of some basic Excel functions.

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Once you’ve mastered this list, move on to CFI’s Advanced Excel

Learn more
Formulas guide!

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9/15/23, 2:40 PM Basic Excel Formulas - List of Important Formulas for Beginners

Basic Terms in Excel

There are two basic ways to perform calculations in Excel: Formulas and
Functions.

1. Formulas

In Excel, a formula is an expression that operates on values in a

range of cells or a cell. For example, =A1+A2+A3, which finds the
sum of the range of values from cell A1 to cell A3.

2. Functions

Functions are predefined formulas in Excel. They eliminate

laborious manual entry of formulas while giving them human-
friendly names. For example: =SUM(A1:A3). The function sums all
the values from A1 to A3.

Key Highlights

Excel is still the industry benchmark for financial analysis and

modeling across almost all corporate finance functions. This
course is designed to highlight some of the most important
basic Excel formulas.

Mastering these will help a learner build confidence in Excel

and move on to more difficult functions and formulas.

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Five Time-saving Ways to Insert Data into Excel

When analyzing data, there are five common ways of inserting basic
Excel formulas. Each strategy comes with its own advantages. Therefore,
before diving further into the main formulas, we’ll clarify those methods,
so you can create your preferred workflow earlier on.

1. Simple insertion: Typing a formula inside the cell

Typing a formula in a cell or the formula bar is the most straightforward

method of inserting basic Excel formulas. The process usually starts by
typing an equal sign, followed by the name of an Excel function.

Excel is quite intelligent in that when you start typing the name of the
function, a pop-up function hint will show (see below). It’s from this list
you’ll select your preference. However, don’t press the Enter key after
making your selection. Instead, press the Tab key and Excel will
automatically fill in the function name.

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2. Using Insert Function Option from Formulas Tab

If you want full control of your function’s insertion, using the Excel Insert
Function dialogue box is all you ever need. To achieve this, go to the

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Formulas tab and select the first menu labeled Insert Function. The
dialogue box will contain all the functions you need to complete
your financial analysis.

3. Selecting a Formula from One of the Groups in Formula Tab

This option is for those who want to delve into their favorite functions
quickly. To find this menu, navigate to the Formulas tab and select your
preferred group. Click to show a sub-menu filled with a list of functions.

From there, you can select your preference. However, if you find your
preferred group is not on the tab, click on the More Functions option –
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4. Using AutoSum Option

For quick and everyday tasks, the AutoSum function is your go-to option.
Navigate to the Formulas tab and click the AutoSum option. Then click
the caret to show other hidden formulas. This option is also available in
the Home tab.

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5. Quick Insert: Use Recently Used Tabs

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If you find re-typing your most recent formula a monotonous task, then
use the Recently Used selection. It’s on the Formulas tab, a third menu
option just next to AutoSum.

Free Excel Formulas YouTube Tutorial

Watch CFI’s FREE video tutorial to quickly learn the most important Excel
formulas. By watching the video demonstration you’ll quickly learn the
most important formulas and functions.

Seven Basic Excel Formulas For Your Workflow

Since you’re now able to insert your preferred formulas and function
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1. SUM

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The SUM function is the first must-know formula in Excel. It usually

aggregates values from a selection of columns or rows from your
selected range.

=SUM(number1, [number2], …)

Example:

=SUM(B2:G2) – A simple selection that sums the values of a row.

=SUM(A2:A8) – A simple selection that sums the values of a column.

=SUM(A2:A7, A9, A12:A15) – A sophisticated collection that sums values

from range A2 to A7, skips A8, adds A9, jumps A10 and A11, then finally
adds from A12 to A15.

=SUM(A2:A8)/20 – Shows you can also turn your function into a formula.

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2. AVERAGE

The AVERAGE function should remind you of simple averages of data,

such as the average number of shareholders in a given shareholding
pool.
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=AVERAGE(number1, [number2], …)

Example:

=AVERAGE(B2:B11) – Shows a simple average, also similar to

(SUM(B2:B11)/10)

3. COUNT

The COUNT function counts all cells in a given range that contain only
numeric values.

=COUNT(value1, [value2], …)

Example:
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COUNT(A:A) – Counts all values that are numerical in A column.
However, you must adjust the range inside the formula to count rows.

COUNT(A1:C1) – Now it can count rows.

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4. COUNTA

Like the COUNT function, COUNTA counts all cells in a given rage.
However, it counts all cells regardless of type. That is, unlike COUNT that
only counts numerics, it also counts dates, times, strings, logical values,
errors, empty string, or text.

=COUNTA(value1, [value2], …)

Example:

COUNTA(C2:C13) – Counts rows 2 to 13 in column C regardless of type.

However, like COUNT, you can’t use the same formula to count rows. You
must make an adjustment to the selection inside the brackets – for
example, COUNTA(C2:H2) will count columns C to H

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5. IF

The IF function is often used when you want to sort your data according
to a given logic. The best part of the IF formula is that you can embed
formulas and functions in it.

=IF(logical_test, [value_if_true], [value_if_false])

Example:

=IF(C2<D3,“TRUE”,”FALSE”) – Checks if the value at C3 is less than the

value at D3. If the logic is true, let the cell value be TRUE, otherwise,
FALSE

=IF(SUM(C1:C10) > SUM(D1:D10), SUM(C1:C10), SUM(D1:D10)) – An

example of a complex IF statement. First, it sums C1 to C10 and D1 to
D10, then it compares the sum. If the sum of C1 to C10 is greater than
the sum of D1 to D10, then it makes the value of a cell equal to the sum
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6. TRIM

The TRIM function makes sure your functions do not return errors due to
extra spaces in your data. It ensures that all empty spaces are
eliminated. Unlike other functions that can operate on a range of cells,
TRIM only operates on a single cell. Therefore, it comes with the
downside of adding duplicated data to your spreadsheet.

=TRIM(text)

Example:

TRIM(A2) – Removes empty spaces in the value in cell A2.

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7. MAX & MIN

The MAX and MIN functions help in finding the maximum number and
the minimum number in a range of values.

=MIN(number1, [number2], …)

Example:

=MIN(B2:C11) – Finds the minimum number between column B from B2

and column C from C2 to row 11 in both columns B and C.

=MAX(number1, [number2], …)

Example:
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=MAX(B2:C11) – Similarly, it finds the maximum number between
column B from B2 and column C from C2 to row 11 in both columns B
and C.

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More Resources

Thank you for reading CFI’s guide to basic Excel formulas. To continue
your development as a world-class financial analyst, these additional CFI
resources will be helpful:
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Advanced Excel Formulas

Benefits of Excel Shortcuts

Valuation Modeling in Excel

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See all Excel resources

Excel Fundamentals - Formulas for Finance

Excel shortcuts, functions, and formulas for financial modeling

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