Table of Contents### The Basic Parts of a Formula

#### Functions Versus Formulas

Entire Site

A function
in Excel is a built-in formula that performs a mathematical operation or returns information specified by the formula. For example, if you had a list of a thousand numbers and wanted to manually look for the highest value, it could take a while. That's where Excel can help. It has a `MAX` function that searches a specified range and returns the highest value. Using another example, if you wanted to calculate the average from a list of numbers, you could use the `AVERAGE` function to calculate the average instead of manually creating a formula that added the numbers and divided by the count of those numbers. In all, Excel has more than 450 built-in functions, so if you know which ones do what, you can save countless hours. In addition to the numerous functions already available, you'll also learn how to create your own custom functions. If you have specific calculations that are customized to you or your business, you can create your own set of custom functions.

The function is the built-in formula provided by Excel. The formula is the function with its arguments. As with every formula created in Excel, each function starts with an = sign. For example, if you place the formula Average(B3:B20), where Average is the function name and (B3:B20) is the argument, nothing happens; however, place an = sign in front of Average and it activates the function. Think of it in terms of using a key to start your car.