Circular references occur when a formula in a cell directly or indirectly references itself. This creates a loop where Excel tries to calculate the cell's value based on itself, leading to errors and incorrect results. Here's how to troubleshoot errors caused by circular references:

Identifying the Circular Reference:

1. Error Message: Sometimes, Excel will display a warning message like "There are one or more circular references..." when you enter a formula that creates a circular dependency.
2. Formula Auditing Tools:
- Go to the "Formulas" tab.
- Click the arrow next to "Error Checking" and hover over "Circular References."
- A list of cells with circular references will appear. Click on any cell to jump to its location.

Fixing the Circular Reference:

1. Break the Loop: The key is to modify the formula to remove the reference back to itself or any cell that ultimately leads back to the original cell. There are several ways to achieve this:
- Change the Formula Logic: Rethink the formula and see if there's an alternative way to achieve the desired result without creating a circular reference.
- Use Helper Cells: Introduce helper cells to hold intermediate calculations and break the circular dependency within the main formula.
- Absolute vs. Relative References: If using relative references in your formula creates the loop, consider using absolute references (e.g., $A$1) to lock onto specific cells and avoid circularity.
2. Disable Iterative Calculation (Optional): In rare cases, you might need iterative calculations, where Excel recalculates the formula multiple times until a convergence is reached. This can be helpful for specific scenarios, but it's not generally recommended. To enable it:
- Go to "File" > "Options" > "Formulas."
- Check the box for "Enable iterative calculation."

Tips:

- Start by checking recently edited formulas, as they're more likely to be the culprit.
- Review formulas in cells with error values (#REF!) as they might indicate a circular reference.
- If you're unsure about a complex formula, consider breaking it down into smaller, simpler formulas.

By following these steps, you should be able to identify and fix circular references in your Excel formulas, ensuring accurate calculations and avoiding errors.