Functions are tools you can use to analyze data and get information. In other words, functions help answer your questions so that you can evaluate and examine your business and make projections.

#### Understanding How Functions Work

Excel uses straightforward formulas to perform simple calculations, such as adding or subtracting, on a number or series of numbers. For example, the formula `=SUM(B4:B8)` inserts the sum of the numbers contained in the range B4 to B8 into the cell containing the formula. These simple formulas are the foundation of many functions. Other functions combine several formulas or procedures to achieve a desired result.

Functions should be entered in the following basic order:

Start a function with an equal sign (`=`).

Enter the function name.

Include information about a cell or range of cells to be analyzed.

Enter arguments about what to do with the selected range of cells.

Some functions require additional information, which is discussed in this hour. For instance, the following is the format for the `ADDRESS` function, which returns a value about a cell address in a worksheet:

=ADDRESS(row_number,column_number,absolute_number,a1,sheet_text)

The arguments `row_number` and `column_number` are required arguments, and the remainder of the arguments are optional.

Some functions allow a variable number of arguments. For example, you can use as many arguments in the `SUM` function as necessary. You can include a maximum of 1,024 arguments in a function, providing that no single string of characters in the function statement exceeds 255 characters.

You can enter functions into your worksheets manually, with a macro, or by using the Insert Function dialog box and the Formula palette.