An absolute reference in Excel is a cell reference that is "locked" so that rows and columns wont change when copied. It refers to an actual fixed location on a worksheet, unlike a relative reference, which changes when copied or filled. To create an absolute reference in Excel, a dollar sign ($) is added before the row and column coordinates. For example, $A$1 is an absolute reference to cell A1. Absolute references are used when you want to fix a cell location. They are designated in a formula by the addition of a dollar sign before the column and row. By doing this, you are fixing the value of a particular cell reference. Absolute references are effective whenever needed and work with any formula in Excel.