Formula can very simple or very complex depending on combination of operators, cell references and/or static values used. Formula result depends on how different operators are evaluated.

Default precedence of operators in Excel are given in table below-

For example we want to calculate Tax on Net Income, essentially expenses to be reduced from Income and then Tax rate is to be applied to net value.

In picture below, simple operators are being used in formula but due to default order of operators calculation, B3*C3 is evaluated first and then subtracted from A3 which resulted into 91 which is not the desired outcome.

We can use parentheses to override Excel’s built-in order of precedence. Now if same formula is modified by using parentheses to calculate desired result. Expenses are subtracted from Income by putting this expression within parentheses so that this is evaluated first and then it is multiplied by Tax rate. Formula is corrected in picture below to give desired result.

The golden rule for everyone is that** if you are not sure, use parentheses to ensure correctness in most of your formulas**.

Please attempt the exercises in the attached sheet(below) to hone up your skills and undesrstanding of operator precedence in excel.

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