When a formula (formula: A sequence of values, cell references, names, functions, or operators in a cell that together produce a new value. A formula always begins with an equal sign (=).) refers back to its own cell, either directly or indirectly, it creates a circular reference. A circular reference can have a significant impact on performance because it can iterate indefinitely. Iteration is the repeated recalculation of a worksheet until a specific numeric condition is met. By default, iterative calculations are turned off in Microsoft Excel. You can handle a circular reference by doing one of the following: remove the circular reference or enable iterative calculations.