The purpose of this formula is to demonstrate how other formulas and functions can be nested inside the IF function.
The IF function takes three arguments like this:
=IF(logical_test, value_if_true, value_if_false)
In this example, the logical test is the expression F5-E5>2:
=IF(F5-E5>2 // logical test
When this expression returns TRUE, the IF function calls the SUM function to sum values in data1:
SUM(data1) // when test is TRUE
When the expression returns FALSE, IF calls the SUM function to sum values in data2:
SUM(data2) // when test is false
In either case, the SUM function returns a value to the IF function, and IF returns that value as the final result.
This concept can be customized any way you like. To return an average instead of a sum:
To check if F5 and F5 are both greater than 3:
And so on. The point is you can do any calculations you like inside IF. You can even create a nested IF.
Note: nesting other calculations inside a function or formula is a common practice in many more advanced formulas. It is not limited to the IF function. You can find many examples in this list.