A circular reference is created if you enter a formula into a cell and the cell is its own precedent.

The Circular Reference toolbar (shown on next page) indicates the reference of the cell containing the circular reference. If you glance at the formula or the Status bar (at the bottom of the sheet), you can pinpoint the source of the error and correct it.

You can use a circular reference intentionally by using the Iteration box. Iteration enables circular calculation and offers a method to control it.

1. In Cell B1, type the formula =B3-B2 (the result of this calculation is a total without VAT).

3. In Cell B2, type the formula =A2*B1 (calculates the VAT amount). Click OK to dismiss the circular reference warning.

A circular reference is

created in Cell B1. The calculation of the amount without VAT is conditioned upon the calculation of VAT in Cell B2.

From the Tools menu, select Options. In the Calculation tab, select the Iteration box and click OK.

Excel allows you to define the number of iterations (number of times the formula is calculated) until the exact calculation is performed.

© Links are created by moving sheets with Names from one workbook to another. When you move or copy a sheet by selecting its tab, right-clicking, and then selecting Move or copy from the shortcut menu, the sheet with Names that you defined is moved from the active workbook to a new workbook. This results in the creation of unwanted links in the new workbook.

© Broken links are created when the location of the precedent workbook is changed on the hard disk. When you save a workbook that is linked to another workbook and then move or copy the linked workbook to another folder on the hard disk, the first workbook still saves the original reference on the hard disk.

Tip – quick creation of link formulas

Use Paste special to create links automatically. Copy a range of cells with data, select a cell in another sheet or workbook, right-click, and select Paste special. Then click Paste links.