The Custom Report Generator uses a third party tool to generate the reports from the AS/400. This tool can create an Excel (XLS) file, however the data in the cells are text, not numeric. You can tell this because of the green ticks in the top left corner.
If you need to do calculations or formulas, you need to request the report in CSV format. Otherwise, you will have to manually edit the data to be the datatype required for calculations/formulas.
An example of a Custom Report Excel file below: