## Explanation

The formula above evaluates something like this:

```
=SUM(INDIRECT("'"&B6&"'!"&C6))
=SUM(INDIRECT("'"&"Sheet1"&"'!"&"data"))
=SUM('Sheet1'!data)
```

Once the string is assembled using values in B6 and C6, INDIRECT evaluates and transforms the string into a proper reference.

Note you can refer to a named range in a formula without using INDIRECT. For example, the formula in D6 could be written:

```
=SUM('Sheet1'!data)
```

However, if you want to assemble the reference as text, and have Excel treat the text as a reference, you need to use INDIRECT.

*Note: The single quotes are added in the formula above so that the formula will work when a sheet name contains spaces.*