> ## Documentation Index
> Fetch the complete documentation index at: https://docs.cfo.ai/llms.txt
> Use this file to discover all available pages before exploring further.

# Understand the formula model

A formula tells cfo.ai how to calculate a property. The property is the result you want to produce, and the formula is the calculation used to produce it.

If properties are new to you, start with [Properties, metrics, and dimensions](/formulas/core-concepts/properties-metrics-and-dimensions).

For example, a **Gross Profit** property might use this formula:

```text theme={null}
Revenue - `Cost of Goods Sold`
```

Property names with spaces are wrapped in backticks.

## A formula has two parts

Every saved formula has:

* An **expression**, which describes what to calculate
* A **scope**, which describes where the formula applies

The expression above calculates Gross Profit. Its scope might apply everywhere, whenever the model is broken down by Department, or only when Department is Sales.

## Properties can have more than one formula

A property can use different formulas in different parts of a model. You might use:

* One default formula across the model
* A different formula for a particular department
* One formula for Actuals and another for Forecast

cfo.ai chooses the most relevant formula for each value it calculates. A specific formula can override a broader formula without replacing it everywhere.

## Properties play different roles

A property used as a **metric** is calculated or aggregated. A property used as a **dimension** organizes values into groups.

When Revenue is shown by Department, both are properties. Revenue is the metric being measured. Department is the dimension used to organize it, and Sales is one segment within that dimension.

## References follow the current context

A plain property reference normally follows the current segment. If a formula is calculating Revenue for Sales, a reference to `Headcount` uses Sales headcount when that property is available in the same context.

You can also ask for a specific segment, several segments, every value of a dimension, or an absolute value that does not inherit the current segment.

## Next step

Use [Write your first formula](/formulas/get-started/write-your-first-formula) to create a simple property formula and check its result.