A reference that you make in a formula to the contents of a worksheet cell is either a relative reference, an absolute reference, or a mixed reference. It is important to understand the difference and know which to use when creating a formula.
A relative reference to a cell takes the form A1. When you copy or fill a formula from the original cell to other cells, a relative reference will change to indicate the cell having the same relationship to the formula cell that A1 did to the original formula cell. For example, if a formula in cell B1 references cell A1 and you copy the formula to cell B5, the formula in cell B5 references cell A5.
An absolute reference takes the form $A$1; the first dollar sign indicates an absolute reference to column A, and the second indicates an absolute reference to row 1. When you copy or fill a formula from the original cell to other cells, an absolute reference will not change—regardless of the relationship to the referenced cell, the reference will stay the same.
A mixed reference refers absolutely to either the column or row and relatively to the other. The mixed reference A$1 will always refer to row 1, and $A1 will always refer to column A.