Official Content
This documentation is valid for:

Formulas are expressions that contain a calculation which, once evaluated, returns certain value. They are like functions. 

In addition, they are a key way to share knowledge, when used to define the way everytime an attribute is going to be calculated. In such a case, the attribute is not stored in database (unless otherwise stated). We know that special kind of formulas as "global formulas" or "formula attributes".