Formula fields are used to perform calculations and, for example, to copy dynamically text data that is in another field. The formula field can use a simple or advanced formula. In this case, functions (IF, TEXT, TODAY, ISPICKVAL …) are used.
The formula field is updated as soon as one of the source fields is modified and saved. It is read-only and the calculated values are not stored; They can be exploited via reports.
The formula field can be cross-object, that is when creating a formula on an object, you can reference fields from parent objects that are up to 10 relationships away. This allows you to fetch values that are located on other related objects.
Ex: simple formula = amount * 0.1
IF (amount> 8000000, « Hot » , « Cold »)
Ex: I create a formula field on my Opportunity object and in my calculation that references an account field, I need a datum that is on the account object. I will therefore be able to go back to the table of accounts directly from my formula.