What is the purpose of conditional formatting in Excel?

Conditional formatting in Excel allows users to apply specific formatting styles to cells or ranges based on certain conditions or criteria. This feature enhances data visualization by enabling users to immediately identify trends, outliers, or critical information within their datasets.

For example, if a user wants to highlight all sales figures that exceed a specific target, they can set a condition to format those cells with a different font color or background. This makes it easy to quickly spot high or low values without having to manually sift through the data.

The other options focus on different functionalities within Excel. Converting text to numbers is a data transformation process, merging cells is about changing the structure of the spreadsheet layout, and creating charts involves visualizing data rather than formatting it based on specific parameters. Therefore, the correct choice accurately captures the essence of how conditional formatting is utilized in Excel to enhance data interpretation through formatting based on established conditions.