A spreadsheet is a document that stores data in a grid of horizontal rows and vertical columns. Rows are typically labeled using numbers (1, 2, 3, etc.), while columns are labeled with letters (A, B, C, etc). Individual row/column locations, such as C3 or B12, are referred to as cells. Each cell can each store a unique instance of data. By entering data into a spreadsheet, information can be stored in a more structured way than using plain text The row/column structure also allows the data to be analyzed using formulas and calculations.
For example, each row of a spreadsheet may store information about a person who has an account with a certain company. Each column may store a different aspect of the person's information, such as the first name, last name, address, phone number, favorite food, etc. The spreadsheet program can analyze this data by counting the number of people who live in a certain zip code, listing all the people who's favorite food is fried veal, or performing other calcuations. In this way, a spreadsheet is similar to a database.
However, spreadsheets are more streamlined than databases and are especially useful for processing numbers. This is why spreadsheets are commonly used in scientific and financial applications. For example, a spreadsheet may store bank account data, including balance and interest information. A column that stores the account balances of several clients can easily be summed to produce the total value of all the clients' balances. These amounts can be multiplied by the interest rate from another cell to see what the value of the accounts will be in a year. Once the formula has been created, modifying the value of just the interest rate cell will also change the projected value of all the accounts.
The most commonly used spreadsheet application is Microsoft Excel, but several other spreadsheet programs are available including IBM Lotus 1-2-3 for Windows and AppleWorks and Numbers for Mac OS X.