Literal Values as Arguments
A literal argument refers to a value or text string that you enter directly. For example, the SQRT function, which calculates the square root of a number, takes one argument. In the following example, the formula uses a literal value for the function's argument:
=SQRT(225)
Using a literal argument with a simple function like this one usually defeats the purpose of using a formula. This formula always returns the same value, so you could just as easily replace it with the value 15. You may want to make an exception to this rule in the interest of clarity. For example, you might want to make it perfectly clear that you are computing the square root of 225.
Using literal arguments makes more sense with formulas that use more than one argument. For example, the LEFT function (which takes two arguments) returns characters from the beginning of its first argument; the second argument specifies the number of characters. If cell A1 contains the text Budget, the following formula returns the first letter, or B:
=LEFT(A1,1)
Expressions as Arguments
Excel also enables you to use expressions as arguments. Think of an expression as a formula within a formula. When Excel encounters an expression as a function's argument, it evaluates the expression and then uses the result as the argument's value. Here's an example:
=SQRT((A1^2)+(A2^2))
This formula uses the SQRT function, and its single argument appears as the following expression:
(A1^2)+(A2^2)
When Excel evaluates the formula, it first evaluates the expression in the argument and then computes the square root of the result.