What is an Absolute Reference?

In Microsoft Excel and other spreadsheet applications, an "absolute reference" is a specific cell reference that remains fixed or constant when copying or filling a formula across multiple cells. It is denoted by the dollar sign ($) placed before the column letter and row number in the cell reference.

Let's understand the concept of absolute reference using the following example:

Suppose you have a simple Excel worksheet with data in cells A1 to A5 and corresponding values in cells B1 to B5. You want to calculate the total for each value by multiplying it with a fixed tax rate in cell C1.

1. In cell C2, you write the formula to calculate the total for the value in B2: =B2 * C1.
2. When you copy the formula from C2 to C3, Excel will adjust the formula accordingly to =B3 * C2.
3. If you copy the formula further down to C4 and C5, Excel will update the formula to =B4 * C3 and =B5 * C4, respectively.

In this case, the row numbers in the formula changed as we copied it down. However, sometimes you may want to keep a specific cell reference fixed while copying the formula. This is where an absolute reference comes into play.

To create an absolute reference, you can add a dollar sign ($) before the column letter and row number in the cell reference you want to keep constant. For example:

1. In cell C2, you write the formula with an absolute reference for C1: =B2 * $C$1.
2. When you copy the formula from C2 to C3, Excel will retain the absolute reference for C1 as =B3 * $C$1.
3. Similarly, when you copy the formula to C4 and C5, the reference remains constant as =B4 * $C$1 and =B5 * $C$1, respectively.

In this case, the absolute reference with the dollar sign ensures that the formula always refers to cell C1 for the tax rate, regardless of where the formula is copied within the worksheet. It remains fixed, allowing you to maintain consistent calculations based on the same fixed value throughout the formula's expansion.

Absolute references are particularly useful when creating complex calculations, working with large datasets, and creating dynamic reports where you want certain values to remain constant across multiple calculations or data manipulations.