You can link the information stored in one workbook to another workbook to ensure that you have up-to-date information at all times. Suppose your company keeps daily sales records in a workbook that is updated each day by another employee. Your job is to summarize the daily sales information so you can then produce a variety of charts that show sales trends over time. You need the daily sales information to do your job.
You could open the other employee's workbook and copy the information into your own workbook. However, if you create a workbook that contains link formulas — also called external reference formulas — to the daily sales workbook, your workbook will always contain the latest data.