When working with Excel, we sometimes encounter this warning message:

“Careful, we found one or more circular references in your workbook that might cause your formulas to calculate incorrectly.”

*Figure 1. **Circular Reference warning** message*

As defined, a circular reference means that a cell contains a formula that refers to itself, or it contains a reference to another cell, whose value also refers back to the selected cell.

**Circular reference examples**

**Formula containing the cell itself**

Below is an example of a formula that results to a circular reference. Note that the formula in cell C8 is =SUM(C3:C8), which contains the cell C8 itself.

* Figure 2. Formula containing the cell itself*

When the warning message displays, we can either click OK, Help or close the message window. Excel then returns the last calculated result for the cell, or it simply returns zero “0”.

* Figure 3. Zero value for cell with circular reference*

**Cell reference to a cell that refers back to itself**

The example below shows that cell B2 refers to the value in cell C2. However, C2 also refers back to B2. Hence, the circular reference.

There are cases when precedent or dependent tracer arrows are instantly shown. We can use this feature to easily trace and fix circular reference.

* Figure 4. Two cells referring back to each other*

**How to find circular references?**

**Error Checking menu**

In order to find the cells containing circular references in our worksheet, we follow these steps:

- Click
tab >*Formulas*>*Error Checking**Circular References*

This option displays the last cell that was entered with a circular reference. In this case, cell C8.

* Figure 5. Circular Reference cell address*

**Status Bar**

Alternatively, the status bar also helps us find circular reference, as shown below.

* Figure 6. Status Bar displays cell with circular reference*

If the circular reference exists in another worksheet, the status bar only displays **“Circular References”**.

* Figure 7. Status Bar preview of circular reference in another sheet*

In order to identify the cell with circular reference in another sheet, we click on the Error Checking menu in Formulas tab.

* Figure 8. Circular Reference cell address in another sheet*

**How to remove circular reference****?**

Excel does not have a formula to remove circular references at once. That task falls on us and we need to review and edit the formula in each cell identified with circular reference. For example, in cell C8 below, we can edit the formula such that it does not refer back to itself.

* Figure 9. Circular Reference example*

Change the formula in C8 to =SUM(C3:C7). The cell will display the result of calculations “2700”. In order to verify that we have removed the circular reference, the Error Checking menu in Formulas tab will not display any cells with circular reference.

* Figure 10. Output: **Remove circular reference*

**How to allow circular reference****?**

Generally, we don’t want to have circular references in our worksheet. However, there are some rare cases where circular references are needed to arrive at a desired result.

A circular reference is not allowed when iterative calculations are turned off. By default, iterative calculations are disabled in Excel. In order to enable iterative calculation and thus allow circular reference, we follow these steps:

- Click
>*File**Options* - In
dialog box, click*Excel Options*and tick*Formulas**Enable iterative calculation*

* Figure 11. Enable iterative calculation in Excel Options*

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