RAM usage on a slow MacBook with OS X Yosemite
While Apple says you need a minimum of 2 GB RAM and 8 GB of disk space, those are the minimums.

I would recommend adding RAM to speed things up. (4 GB would be just enough, the more the faster).

Look up your model and get it if it is not MacBook Air. (no upgrade for MacBook Air).

You are correct, there is no formatting, but to speed up the hard drive, use Disk utility to do so.

Getting it back to factory settings would mean to erase all data and do a fresh instal--usually not necessary since you can refresh the operating system online (Internet) using the cmd+r during start up.