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A named range in a spreadsheet refers to one or more cells that have been assigned a specific name, allowing for easier reference in formulas. By using named ranges, users can create more understandable and readable formulas because they can replace cell references with meaningful names. For example, instead of writing a formula that references cell "A1" directly, a user might create a named range called "SalesTotal" and use it in their calculations, making it clearer what that cell represents.

This feature enhances the usability of spreadsheets, especially in complex documents where keeping track of various data points can be challenging. Named ranges can be easily managed and updated, making them a valuable tool for anyone working with data in a spreadsheet environment.