Creating Complex Formulas in Microsoft Excel 2016

Working with numbers in Excel is fun when you know how formulas work. You may already know how to add or subtract using simple formulas. But when your formula includes multiple operations like addition, multiplication, or exponents, Excel follows a specific order called the Order of Operations. Learning this will help you create accurate and complex formulas easily.

Understanding Complex Formulas in Excel

A complex formula in Excel includes more than one operator. For example, =5+2*8 looks simple, but Excel doesn’t calculate it from left to right. It follows rules that determine which part of the formula to solve first. Let’s explore these rules.

The Order of Operations (PEMDAS)

Excel follows the same order of operations as in mathematics. The order is:

• P – Parentheses ( )
• E – Exponents ^
• M – Multiplication * and D – Division / (from left to right)
• A – Addition + and S – Subtraction - (from left to right)

To remember this, think of the phrase “Please Excuse My Dear Aunt Sally.”

Example of Order of Operations

Let’s solve the formula step-by-step:

=10+(6-3)/2^2*4-1

• Parentheses: (6–3) = 3 → Now the formula is 10+3/2^2*4-1
• Exponents: 2^2 = 4 → Now 10+3/4*4-1
• Division: 3/4 = 0.75 → Now 10+0.75*4-1
• Multiplication: 0.75*4 = 3 → Now 10+3-1
• Addition: 10+3 = 13
• Subtraction: 13–1 = 12

Final Answer: 12

When you type this formula in Excel, it will also return 12. Understanding this logic ensures your results are always correct.

Creating Complex Formulas with Cell References

Instead of using numbers directly, Excel allows you to use cell references. This makes your formulas flexible and easier to update. Here’s an example:

=(B3*C3)+(B4*C4)

• B3*C3 → 2.79 * 35 = 97.65
• B4*C4 → 2.29 * 20 = 45.80
• Add them → 97.65 + 45.80 = 143.45

The result is $143.45. Adding parentheses makes the formula easier to read and avoids confusion.

Practical Example – Calculating Sales Tax

Let’s say you have a catering bill, and you want to find the sales tax. Your formula could be:

=(D3+D4+D5)*0.075

• Step 1: Add items inside parentheses → (45.80+68.70+159.60) = 274.10
• Step 2: Multiply by 7.5% → 274.10 * 0.075 = 20.56

Your sales tax is $20.56. If you forget the parentheses, Excel will perform multiplication first, giving you the wrong result. So always group your calculations properly.

Steps to Build Complex Formulas

• Start with equals (=): Every formula begins with an equal sign.
• Use cell references: Instead of typing numbers, refer to cell addresses like A1 or D3.
• Combine operators: Use +, -, *, /, or ^ for arithmetic.
• Use parentheses wisely: Control the order of operations.
• Press Enter: Once complete, press Enter to see your result.

Advanced Techniques

• Array Formulas: These formulas can calculate multiple results at once. In Excel 2016, use Ctrl + Shift + Enter to apply them.
• Formula Evaluation Tool: Use this tool to see how Excel solves your formula step by step. Find it in the Formulas tab under Evaluate Formula.

Common Mistakes to Avoid

• Forgetting parentheses, which changes the calculation order.
• Using incorrect cell references after copying formulas.
• Not checking for hidden spaces or incorrect symbols.

5 FAQs of Creating Complex Formulas in Excel 2016

Conclusion

Creating complex formulas in Microsoft Excel 2016 may sound challenging, but with a little practice, it becomes easy. Remember to follow the order of operations, use parentheses correctly, and rely on cell references for accuracy. With these steps, you can confidently handle even the most detailed calculations like a pro!