When you copy a formula containing relative references in Excel, the cell references within the formula adjust based on the relative change in position between the original cell and the copied cell. Here's how it works:

Imagine this scenario:

- You have a formula `=A1+B1` in cell C2.
- Cell A1 contains the value 10 and cell B1 contains the value 5.
- The formula in C2 calculates 10 + 5 and displays the result, 15.

Now, if you copy the formula from C2 to D3 (one column to the right and one row down):

- The original formula `=A1+B1` becomes `=B2+C2` after copying.
- Why? Because:
- A1 is two columns to the left of C2 (relative movement). When you copy one column to the right, the reference needs to adjust one column to the right as well, so it becomes B2.
- B1 is in the same row as C2. When you copy one row down, the reference needs to adjust one row down as well, so it becomes C2.

Essentially, the relative references in the formula shift by the same number of rows and columns you move the formula itself.

This automatic adjustment is helpful when you want to copy a formula across multiple cells while maintaining the calculation logic. It saves you time from manually changing each cell reference.

Here are some additional points to remember:

* Up one row = reference moves up one row (e.g., A1 becomes A2).
* Down one row = reference moves down one row (e.g., A1 becomes A2).
* Right one column = reference moves right one column (e.g., A1 becomes B1).
* Left one column = reference moves left one column (e.g., A1 becomes Z1).

By understanding relative referencing, you can efficiently copy and apply formulas across your spreadsheets in Excel.