# How Do Spreadsheets Work?

by Contributing Writer; Updated September 26, 2017### Basics

A spreadsheet is a tool composed of several rows and columns and is usually generated with a computer program. The spaces where information can be entered on a spreadsheet are called cells. The general function of a spreadsheet is to organize data into an easy-to-read and understandable format. Each cell in the spreadsheet represents data relevant to the task at hand. For instance, if a business owner is calculating his profit margin for the month, he will often enter sales into a spreadsheet along with operating costs for the business. If the spreadsheet is filled out properly, the business owner will have a log showing how much he is making or losing overall.

### Formulas

A spreadsheet can also be set up with automated functions to help make the input of data a simpler and more efficient task. This is accomplished by using formulas. Formulas in a spreadsheet are generally math equations and can be tailored to a specific set of data. The formulas are formed by telling the spreadsheet program what cells to use when calculating the equation. For example, if you wanted to multiply the value of cell C3 by the value D7, enter =C3*D7 in an empty cell where you want that specific data to appear. The program will then multiply the values of those two cells and provide you with the final result.

### Input and Output

Spreadsheets have two main sections: input and output. The input section for a spreadsheet is where you first enter the data that you would like to calculate along with the respective formulas that you would like to use. The output sheet in your spreadsheet will look for and then show you the results of the data and calculations entered on the input sheet.

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