What is the difference between relative and absolute cell references?

Relative cell references and absolute cell references serve distinct purposes in Excel, primarily related to how cell references are treated when formulas are copied to different locations within a worksheet.

When using relative references, the cell reference adjusts based on the position of the formula. For example, if a formula in cell B2 refers to cell A2 as a relative reference, and you copy that formula down to B3, the reference will automatically update to A3. This feature allows for efficient calculations across a range of cells without needing to manually adjust each reference.

On the other hand, absolute references remain fixed regardless of where the formula is copied. This is achieved by placing a dollar sign before the column letter and row number (e.g., $A$2). If a formula containing an absolute reference is copied to another cell, the reference to the original cell will not change, ensuring that the formula always refers to the same original value.

Understanding this difference is crucial for effective data manipulation in Excel, as it determines how formulas calculate results when adapted across multiple cells.