Circular Reference in Microsoft Excel

If we use Excel for any length of time to create the dashboards, templates, reporting format, etc. in which we have to use formulas then the possibility is to create a formula that results in a circular reference. In this article, you will learn about Circular reference in Microsoft Excel. What is the use of Circular reference?

What is Circular reference?

When the formula depends on the same cell in which it is written, Excel pops up an error message. In other words, you should not write a formula in a cell that depends on itself. It doesn't mean we can't.

For example, if you try to put values 10 in Cell A1 only if A1 is blank, you will write a formula in cell A1 and it will check A1. The formula will be something, IF(ISBLANK(A1),10, A1). It won't work unless and until we unable the circular referencing. It will also result in circular referencing when the formula depends on another formula and that formula depends somehow on the first cell itself. Confusing? Have an example?

Let’s take another example and understand:-

image 1


In the above-shown image, we have agent data. Below the data, we have a summary for a number of agents and average scored value. To calculate the number of agents we have used COUNTA function and for average we have to use the Average function.

Now to know about the circular reference follow the steps below:-

  • Enter the formula in cell B2
  • =B7-SUM(B3:B6)

image 2


  • Press Enter on your keyboard

image 3

image 4


Now to check the reason of showing the circular reference follow the steps below:-

  • Go to Formulas Tab.
  • In the group of Formula Auditing
  • Click on Error Checking
  • Click on Circular Reference

image 5


  • In the drop down list you can find the cell references

Conclusion: - When you are working in Excel sheet for templates and dashboard this problem is very common so it occurs. This article will be helpful to rectify this kind of problem while working in Excel.

How to allow Circular Referencing in Excel?


On the Excel ribbon, click on the File button. Go to Options.  Excel Options Dialog will open.

Click on the Formula option. Here you will find Allow iterative calculations. Check to allow circular calculations. You can control the number of iterations and maximum change too.


This will allow the circular referencing, and excel will not show any error when do circular referencing but you might not get the answer you wanted.

So yeah guys, this what circular referencing in Excel. I explained why a circular referencing error occurs and how you can allow circular referencing. I hope it was helpful to you. If you have any doubts regarding this topic, ask in the comments section below.

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