Using Drag-and-Drop to Create a Hyperlink

The best way to make it work all the time it to type some text into the target cell. It will then always link the cell as a hyperlink. If the target cell is blank it mostly works but often will display the link code and you have to edit the hyperlink to put in the text that you require. Sometimes it sends the cursor to some other part of a worksheet based on the cell position.
I am on Office 365 and use it regularly to create hyperlinks between worksheets. It is quick and helpful when it works. I have given up trying to work out why it does not work sometimes.
For those who can't get it to work: Click on a cell in a worksheet that you want to link to. It must have text in it. RH mouse+Alt to get the cursor to go into another worksheet. Place green box into the target cell that has text in it. Release Alt. Release RH mouse. Instruction box displays saying Create hyperlink here. If it displays the link code and not the text that you require RH mouse and Edit hyperlink. Type in the text you want up top.
It is a very quick way of linking two cells in two separate worksheets allowing you to rapidly get from one worksheet to another.

Beware that this may create an external reference in the second workbook, and if it does then you'll be prompted to update that reference every time you open the second workbook. And if you move or rename the first workbook you'll be in the nightmare loop of being prompted to update a broken link in the second workbook (which should be easy to break or re-path but usually doesn't end up working for me for whatever reason).

Also note that you are linking to a cell, not a value in that cell, so if you sort or otherwise edit, the value rendered by the hyperlink may not be what you expected. It sounds 'Duh' when I type that, but a lot of novice users are confused when that happens so just sayin' :).

Don't know if anyone knows the answer but I regularly use this method to link a cell in a worksheet to another cell in a separate worksheet. For many months it has been working perfectly but in the past month it has been failing to link to the target cell more and more. Sometimes it is OK mostly it fails.
When it fails, the cursor moves to the same cell reference (let's say ABC12) in the target worksheet as it tries to create a hyperlink there whereas it should be going to the source cell (ABC12) in the other worksheet. This is frustrating because it takes time to get the cursor back into the right place in the worksheet.
I have tried saving the file before I attempt doing the hyperlink and clicking on the source cell as Allen advises but nothing helps.
Anyone have any ideas why it works sometimes and then sometimes will not?
I am on Win10 x64, MS Office 2010 but have changed nothing.
MalR

Don't try it on a new workbook. Save you workbook before you try it. It works only on a saved workbook.
p.s. it works on the same sheet too.

Ditto, didn't work for me either.
"Create link here" works fine, giving usual excel cell references.
But "Create hyperlink here" didn't work - nothing placed in the target cells, and cursor moves to of left of screen.

STOP PRESS - Checked the MS help pages...
** The method only works if both sheets have previously been saved.**

Did this, and it now works! Suggest ttat the tip is updated.

I am running Excel 2010 under Windows 7. I cannot get this tip to work at all.

(1) After selecting the "target area" in step 2, step 3 does not make any sense - there is no thick box surrounding the selected cell(s) and the mouse pointer does not change when it is over the selection.
(2) As soon as I right-click there, the context menu appears and I cannot drag the selection anywhere

I have tried it with the two workbooks open in (a) separate instances of Excel and (b) the same instance. It does not work in either case.

I CAN achieve the object by creating a formula or array-formula that references the target area, but not by drag-and-drop!

good