Waterfall Chart Templates

What is a Waterfall Chart?

A waterfall chart is a type of bar chart used in demonstrating the progression toward a cumulative result while indicating how positive or negative components or values contribute to the total. Also known as a bridge chart, a flying brick chart, or the Mario chart specifically in finance, it is used in project management plans in a corporate setting for displaying how specific segments are contributing to one’s end goals and/or the overall result. Compared to a simple bar graph or line chart, a waterfall chart allows you to showcase the complexity of the data and uncover some hidden points in your cumulative numbers. 

It distributes all of the varying components that contributed to that net change and visualizes them one at a time. From the name itself, this chart looks like a waterfall or a staircase moving up and down. The first bar starts from the zero baseline of the x-axis which displays the initial quantity of a particular measure. Next, there is a series of bars with different heights, seemingly floating in space as they often rise to a peak and then fall down towards the baseline. After that, these floating bars lead up to one final bar that displays the ending quantity. 

Uses of Waterfall Charts

Financial analysts, insurance agents, economic analysts, investment analysts, human resources (HR) managers, and other professionals working in finance, insurance, and HR sectors use the waterfall chart for different purposes. Understand the different purposes and uses of the waterfall charts in different fields and industries. 

Showcase Changes in Employees and Staffing Levels: HR managers and HR professionals use waterfall charts to visually depict every component of the change in the number of employees or staffing levels over the course of a specific year. They can easily show the number of people who quit during the year and the number of newly hired people, as well as the number of people who were transferred from another department. These components can only be seen thoroughly with a waterfall chart as it conveys the big picture of the data. Demonstrate the Number of Legal Business Contracts and Deals: Some people working for the legal department of leading business corporate firms use waterfall charts, especially those who are in charge of all the business contracts and deals of the corporate firm. With a waterfall chart, a person in the legal department assigned to this task starts the financial year carrying forward the business contracts and deals from the preceding year. Include to this the deals and contracts won throughout the year. Then, he or she drops off the contracts that were canceled throughout the year. Lastly, he or she will obtain the total number of contracts that are realized at the end of the year. Visualize Financial Statements: Accountants, financial analysts, and other professionals in accounting and finance use the waterfall charts so that they can illustrate the major components of an income statement or a profit and loss statement with a visual representation. A waterfall chart allows you to set a subtotal to display the absolute value. Add the main points of your financial statement such as the amount of gross revenue and rev adjustments (net revenue), inventory, merchandising, and other sales costs (gross income), staff, marketing, and facilities costs (operating income), and taxes. Include in your chart the line item accounts such as the net revenue, gross income, operating income, and net income. Navigate Data about Population, Births, and Deaths: Statisticians working on census and analyzing population rates, birth rates, and death rates utilize waterfall charts to visualize annual population changes by plotting the number of births and the number of deaths with the net growth. This graphic representation helps them to have a detailed look at how births and deaths contribute to the total population growth. Set all population category items as subtotals so that you are able to visualize each component effectively. Thus, the waterfall chart is beneficial to incorporate an additional layer of information beyond what a common clustered bar graph or column chart would depict. Assess Personal Academic Performance: If you are a student who had undertaken a graduate school admissions exam, create a waterfall chart to assess your academic performance and create performance reports. In this way, you can see and evaluate the number of questions that you answered correctly in the verbal and quantitative sections, plus the number of questions that you got wrong in both verbal and quantitative sections. Add up both scores so that you can finally know your final score in your school admission exam.

Alternative Charts and Graphs to a Waterfall Chart

Aside from using waterfall charts for visualizing your projects, financial statements, and other tasks, you can use different types of charts, diagrams, and graphs for your data analysis and documentation plan. Here are some alternative charts and graphs to a waterfall chart that you can use if you need to use other graphical representation tools for your work.

Stacked Area Charts and Bar Graphs: These charts are used to demonstrate changes in multiple variables across time. Statisticians use stacked area charts as they draw multiple lines to closely monitor the population changes of different states and regions across time. Color the area below each line with a different hue to depict the state it represents to illustrate a graph that represents population trends while showing the data of each state from the least to most populous simultaneously. These charts are also ideal if you need to compare values that would usually require multiple line graphs. For instance, construct a stacked area chart with one axis that signifies a numeric value, while another axis signifies a timeline or data for different categories over time. Mosaic Charts: Also known as Mekko charts, mosaic charts are used to compare multiple variables or multiple categories at the same time. This type of chart allows a market analyst to compare the size of the consumer bases and the age groups within each group and to display all the variables in a clear and direct-to-the-point manner. For example, one axis of the chart indicates shows the categories being compared while the other axis displays varying age ranges of the consumers. Each cross-section of the mosaic chart has its own size and color that aligns with the market segment it signifies based on what is shown in the chart’s legend. Spider Charts: Also referred to as radar charts, spider charts are used in marketing and science to visually compare three or more quantitative variables in order to uncover trends and compare all categories at the same time. A spider chart typically has a series of radii, each signifying a different category, that spread out from a center point like spokes. Each spoke’s length corresponds to the value being compared. The spoked are then connected with a line of a specific pattern or color for each category as it creates a star-like shape with points equivalent to the number of categories. Gantt Charts: Project managers and team leaders use Gantt charts to diagram projects and schedules. These are unique types of bar graphs that utilize colored bards of varying lengths to indicate the start and end dates of a project, important events, tasks, milestones, and specific timeframes. Plus, Gantt charts are effective data visualization tools to reflect the dependency relationships of the activities. Pareto Charts: If you need to present sufficient information to draw the fundamental conclusion, use a Pareto chart to point out the most significant of a set of factors. It is a combination of a bar graph and a line graph which illustrates the individual values of the categories and the cumulative total of the overall set.

How to Create a Waterfall Chart

Although the rise of technology and the increased access and proficiency in word processing applications, Excel spreadsheets, and data presentation software has allowed us to collect and analyze greater amounts of data, there are still many people who are having difficulties in telling stories with numbers using charts, diagrams, charts, tables, and many other graphical representations. Follow the four steps in this section for creating a modern and sleek waterfall chart.

Step 1: Use a Waterfall Chart Template in Your Preferred Format

Search for some sample downloadable and editable waterfall chart templates around the internet. Sample.net contains a diverse collection of chart and graph templates such as Gantt chart templates and waterfall chart templates that you can easily and quickly use for your data analysis work. Select from our chart template collection and download your preferred waterfall template in Excel, MS Word, or PDF format.

Step 2: Format the Waterfall Chart Template

If you are using Excel, open the chosen waterfall chart template and edit the categories, labels, and data points. In the default Excel waterfall chart, you will see red and blue columns, demonstrating the increases (blue) and decreases (red), plus a generic title. Make any formatting changes to the chart as you change the text in the chart title. Format a Total column by clicking it to select the entire data series, clicking on it again to select the column, right-clicking on the Total column, and clicking the Set as Total command in the pop-up menu. Then, you will notice a green fill color in the Total column.

Step 3: Edit the Chart Style

The next step is to edit the chart style of your waterfall chart template. If you don’t like to keep the default chart style with numbers displayed on each column, you can choose and apply one of the other built-in styles available in Excel and other formats. To change the chart style, click and select the chart, click the Paintbrush button located in Chart Styles at the right side of the chart, scroll through the list of chart styles, and click on a style you want to apply to your chart.

Step 4: Customize More and Save Your Waterfall Chart

If you want to change the colors of the different types of values in your waterfall chart, you can customize it to maximize the clarity and impact of the chart details. On the Design tab, open the Change Colors gallery to change the color of your chart. Select a color scheme that is automatically filled with themes that are perfect for your document. After customizing, check your entire chart if you miss any important category, label, or value, and save your file.

FAQs

What is a waterfall analysis?

A waterfall analysis is a data visualization and data analysis tool that guides investors and shareholders in creating financial models of the total amount each shareholder would obtain after the exit of the business firm. These financial models go through in-depth calculations to enable users to observe potential exit scenarios.

Why do we use waterfall charts?

Waterfall charts are essential graphical representation tools to visualize change from a starting to an end value and to illustrate the positive and negative data points. These charts are simple to understand, provide micro-stories, visualize profit and loss statements, compare product earnings highlight budget changes on a project, analyze inventory or sales over a period of time, create executive dashboards, show attrition and growth in hiring, and many other purposes. 

Are waterfall charts quantitative charts?

Waterfall charts can be used for wide-ranging types of quantitative data analysis such as inventory analysis, cash flow analysis, performance analysis, financial analysis, market trends analysis, project budget analysis, and many others.

If you need to visualize change and growth in your sales and marketing, share industry statistics using an infographic, compare product earnings and highlight product value over time or depict the positive and negative contributions of your projects in your department with a waterfall chart, think carefully as you plan and execute all the fundamental points aforementioned in this article when you prepare your waterfall chart. Be skilled in visualizing data and telling stories with it so that you can turn it into vital information that can be utilized to facilitate better decision-making. Additionally, we offer an extensive collection of sample waterfall charts, diagrams, graphs, infographics, tables, and other visual representation documents for your work such as a graph paper PDF, and control charts.