# Formulas Overview

Introduces you to formulas, usage, and our design philosophy.

Formulas provide broad, flexible, powerful features that enable all users to automate calculations, build values from drivers, and create complex interrelations among accounts. Formulas can range from simple expressions such as sums or quotients for calculating metrics to complicated employee benefits or sales commission calculations.  The formula syntax for Adaptive Insights is easy to read and maintain. Editing and analysis of formula values and meaning is straightforward.  Anyone with basic data entry skills can use formulas to perform their data entry and can explore the meaning and origin of data being generated from formulas.

## Usage Examples

This formula calculates an inventory turnover ratio by dividing the cost of goods sold by the average inventory.

`DIV(ACCT.CostOfGoodsSold, ACCT.Inventory)`

This more complex formula applies an employee's planned raise, but only in the first month of the fiscal year.

`IF(this.Year.PositionOf(this.Month)=1,ROW.ExpectedRaise,0)`

This formula calculates the sales of service contracts as a percentage of sales of vehicles.

`DIV(ACCT.Sales[ProductType=ServiceContract], ACCT.Sales[ProductType=Vehicle]) * 100`

See Formula Examples: Overview for more.

## Design Philosophy

Adaptive Insights gives you the tools to create formulas that represent the realities of your business in all its complexity. With extensive business logic and functions readily available, it’s easy to write, explain, and maintain complex formulas. Write them once and apply them anywhere in your model, wherever it makes sense, whether that's during the building of the model, the planning stage, reporting and analysis, or all of the above.

When used for planning, formulas often have significant tradeoffs to manage:

• Excel provides flexible and powerful formulas that are available for any user to use during data entry. However, the formula building blocks are based on cell letters and numbers, rather than descriptive terms. When you write formulas, it’s easy to make a mistake that can be hard to find, and easy for formulas to break when rows or columns are added or moved. Excel formulas are also often hard to follow, making it difficult to determine if your model is broken.
• In contrast, most planning applications generally provide better guidance than Excel for creating formulas (by allowing descriptive names for formula building blocks, or providing syntax guidance). However, these systems typically restrict which users can create formulas, forcing you to rely on formula administrators or programmers with a specific set of permissions to do the work.