Without formulas, an electronic spreadsheet would not be any better than its paper counterpart. It is the ability to enter and recalculate formulas that gives an electronic spreadsheet its real power. Formulas can link result cells to other cells in the spreadsheet. These other cells can, in turn, reference still other cells so that a recalculation of the entire spreadsheet can have a cascade effect. Through formulas, a single cell can affect cells throughout the entire worksheet.
Formulas can reference cells either through the cell's address (e.g. K20) or through defined range names. Both cell addresses and range names can be either relative, absolute, or a combination of the two. Relative cell addresses and range names change when the cell's formula is copied to another position in the worksheet. Absolute cell addresses and range names do not change when the cell's formula is copied to another position in the worksheet.