Quick! What does the formula "=sum(A5:A15) * $B$2" mean?

Of course, you have no idea. Sure, it sums up some numbers and then multiplies the result by something else, but we have no idea what it's really up to. Even if you were looking at it in context (i.e., with the rest of the spreadsheet) it might be confusing.

OK. How about "=sum(car_sales) * sales_tax_rate"?

Obviously, this one makes more sense. We're computing the total sales tax on a group of automobile sales.

Subsection(s)

Why name a cell or cells?

The key to the increased readability is the use of named ranges. Once you've named a range, you can use the name in all of your formulas for increased readability.

At first glance, naming ranges seems like a waste of time. It isn't. Why bother to name ranges?

• Names are just plain easier to understand than something like A1:A10.
• It's really hard to read formulas when the cells they reference are off-screen. Larger spreadsheets, that take up more than one screen on the computer, are much harder to follow without names because you can't always see the cells you're referencing.
• While your spreadsheet might make perfect sense to you, in a business setting there's no guarantee that you will be the one maintaining the spreadsheet. No matter what you do on a computer, always do your best to make sure someone else could figure it out.

Things to know about named ranges

Named ranges are always absolute references

There's no such thing as a named range that changed when used in a formula. This makes sense, if you think about it: you wouldn't want a single name referring to more than one place on the spreadsheet, or you'd get incredibly confused.

Named ranges can be any size

You can name as large or small a range as you like. In particular, you can name exactly one cell, which is a lot more useful than you might think.

You should almost always use a named range instead of an absolute cell address

Named ranges are absolute, and they're so much easier to read that you're almost always much better off using a named range.