Using named ranges allows you to describe the meaning of a cell(s) contents and use this defined name in place of an actual cell address.
For example, formula
=A5*B5 can be replaced with
=Width*Height to make the formula much easier to read and understand.
To define a new named range, select cell or cells to name and then type new name into the Name Box next to the formula bar.
Note: Named Ranges default to global scope meaning that they can be accessed from anywhere within the workbook. Older versions of Excel allow for duplicate names so care must be taken to prevent duplicate names of global scope otherwise results will be unpredictable. Use Name Manager from Formulas tab to change scope.