Absolute references are the opposite of relative references—they don’t change, no matter where a formula is copied or filled. In this way, they’re actually simpler than relative references.
They just aren’t as common.
To see a situation where you might use this, let’s look at the second sheet in our example workbook. Here, we have the same list of names and annual earnings.
We also have a multiplier column; we’ll use absolute references to multiply the earnings by that number.
Before we do, though, let’s see what happens when we use relative references.
Click into cell C3 and type =B3*C2, then hit Enter and fill that cell down a few spaces.
As you can see, we didn’t get 1.5 times each of the earnings values. Instead, we got 1.5 times the first earnings value, then the second times the first, the third times the second, and so on. This is the problem with relative references—you don’t always want the cell reference to change.
Let’s use an absolute reference instead.
Delete those values, and click back into cell C3. Type =B3*$C$2 and hit Enter. Then drag that cell down.
That looks much more reasonable, doesn’t it?
The dollar signs before the column letter and row number lock them in place—no matter where you copy or fill the formula, it will always look to cell C2.