Use Parentheses in Complex Formulas

When a formula has multiple arithmetic signs, Excel follows an order of priority in performing calculations. Excel multiplies and divides before it performs addition and subtraction. Parentheses should be used to indicate calculations that should be performed first. Get it right, use parentheses to indicate how calculations should be performed. For example, the formula for year one straight-line depreciation expense is =(5100-300)/5 .

This formula indicates that the $300 salvage value is subtracted from the $5100 cost first, and then that new amount is divided by 5.

The formula 5100 - 300/5 equals 5040 and not 960.