How is cell reference useful in the calculation?

The cell reference is used in the calculation because if the number in the cell reference is changed, then Excel will automatically update the calculated value.

MS Excel labels its columns in letters (from A to XFD) and rows in numbers (from1 to). The intersection of a column and a row is a cell, which is denoted by its respective column and row labels (e.g. A1, the top leftmost cell, and XFD, the bottom rightmost cell).

More often than not, an Excel spreadsheet is used for handling huge amounts of data and calculations of these data. At certain times, these data are used over and over again in calculations, which, when typed into certain target cells, can be repetitive and may lead to errors (human error or rounding error). This is where cell referencing becomes important: instead of having to re-type a cell's value, the cell reference can be used in a calculation in another cell. If the cell being referenced contains a value that is the result of a calculation, there would be no need to re-type all of the digits of that cell. Its cell address is enough to complete the job.

A “cell reference” means the cell to which another cell refers. It is useful as in replicating formulas and eases the calculation. 

There are three types of cell references.

Absolute – This means the cell reference stays the same if you copy or move the cell to any other cell. This is done by anchoring the row and column, so it does not change when copied or moved.

Relative – Relative referencing means that the cell address changes as you copy or move it; i.e. the cell reference is relative to its location.

Mixed – This means you can choose to anchor either the row or the column when you copy or move the cell, so that one changes and the other does not. For example, you could anchor the row reference then move a cell down two rows and across four columns and the row reference stays the same. 

it is very important to have the right Cell Reference and the right direction of the reference, I mean absolute or relative.

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