## What is a reference?

The cell reference is the code that identify a cell: **A1, B3, C15, ... BJ375**.

But in Excel, there is absolute, relative and mixed references (but what-is-this-stuff 😲🤔🤨)

It is very important to understand this concept to build your formulas **to avoid mistakes**.

## Relative reference

A relative reference is a reference that will change when you copy it.

**Relative**, because the reference of the cells are not fixed (logic 😉)

You can refer to the following article which explains with a basic example the impact of a vertical or horizontal copy on cell references.

## Absolute reference

An absolute reference is a reference that **will not be changed** during the process of copy. We can also said that the reference is blocked or fixed..

A cell is fixed when it has 2 **$** **sign** on both sides of the reference.

You can easily add the

$ signby pressing the key strokeF4

## Exercise with taxes

Let's see with the calculation of VAT the interest of the absolute reference. The VAT rate is in cell F1.

### Mistake during the copy of the formula

The formula to calculate the prices with the VAT is the following

=E5*F1+E5

By copying this formula down **we quickly identify that there is a problem** because we have many errors in column F.

### How to correct this error?

In this example, it is easy to see that the reference of the cell for the VAT changes when the formula is copied downwards.

So, to stay always on the F1 cell, we will write our formula in the following way:

=E5*$F$1+E5

Now with this writing, when the formula is copied downwards, all the formulas are linked to the cell F1 (the VAT value)

### Make a test to check the formula

Now, let's change the VAT rate to 20%.

All our formulas immediately return a new result without changing a single formula 😍😎

### Simplification of the formula

You notice that we use twice the reference of the total (column E) in the formula. We can simplify the formula by using the factorization rules in mathematics.

=E5*(1+$F$1)

## Reference mixed

A mixed reference is a reference that is blocked either on a column or on a line but not on the 2 references of the cell.

Working with mixed references is a bit more complicated. In this article we will see examples of applications and how to build these references easily.