What is a Formula Field and what are its limitations?

A Formula Field is a read-only field that calculates its value dynamically at runtime based on other fields, functions, and operators. It does not store data — it is recalculated every time it is displayed. Use cases: full name concatenation, age calculation from a date, commission amount based on revenue. Limitations:

1. Cannot directly reference fields from unrelated objects (only parent fields via relationship notation).
2. Cannot reference other formula fields in complex cross-object lookups beyond 5 levels.
3. Formula character limit is 3,900 characters (compiled).
4. They cannot be used in certain SOQL WHERE clauses for performance reasons.
5. They cannot write back to the record — use Flows or Apex for that.