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Excel magic trick number 426 demonstrates how to use a simple VLOOKUP function to assign categories to specific sales numbers in a table. The key is to ensure that the lookup table is sorted in ascending order, allowing VLOOKUP to accurately match values and return the corresponding category. This technique simplifies the process of categorizing sales numbers, making it easy for users to assign labels such as great, good, or excellent. To follow along with the tutorial, viewers can download the workbook from the YouTube channel.