Waterfall Chart

Waterfall Chart Builder

Enter a starting value and your contributors — one per line as Label:Value — to generate a publication-ready SVG waterfall chart with floating bars, connector lines, and data labels.

What Is a Waterfall Chart?

1. 1 A waterfall chart (also called a bridge chart or Mario chart) is a form of data visualisation that shows how an initial value is affected by a series of intermediate positive and negative values to arrive at a final result. The bars appear to float — each bar begins where the previous one ended.
2. 2 The first and last bars typically sit on the zero baseline and represent the starting and ending total. All intermediate bars are suspended — they start at the cumulative value up to that point and show the incremental change (positive bars go up in green, negative bars go down in red).
3. 3 Waterfall charts are most commonly used in finance to show how revenue builds to profit (revenue minus cost of goods minus operating expenses minus taxes = net income), in project management to show budget variances, and in inventory analysis.
4. 4 The key insight a waterfall chart provides — that a standard bar chart cannot — is the running cumulative effect of each factor. Seeing how each expense category erodes the revenue toward net income is far clearer in a waterfall chart than in a table.

Waterfall Chart Example — Income Statement Bridge

In the waterfall chart visualisation the first bar (Gross Revenue) sits on the baseline. Each subsequent bar floats — starting where the previous bar ended. Green bars represent positive contributions and red bars represent reductions. Subtotal bars can optionally be included to show intermediate totals.

Original illustrative example — see Microsoft Excel waterfall chart guide for step-by-step formatting instructions.

How to Build a Waterfall Chart

1. 1 List all categories in the sequence they occur — starting value, each incremental change, and ending value.
2. 2 Calculate the running cumulative total for each row — this determines where each floating bar starts.
3. 3 For the starting and ending bars use the full value. For all intermediate bars use the incremental change amount (positive or negative).
4. 4 In Excel — use a stacked bar chart with an invisible lower section (set fill to no fill) and a visible upper section for the change amount. Colour positive increments green and negative red. Or use the built-in Waterfall chart type in Excel 2016 and later.
5. 5 Add data labels showing the incremental change value on each bar for readability. Subtotals and the final bar should show the cumulative total.

Waterfall Chart Uses

• Income statement bridge — show how revenue is reduced by costs and expenses to arrive at net profit or EBITDA. The most common business use.
• Budget vs actual analysis — show how actual spending compares to budget by displaying each variance as a positive (under budget) or negative (over budget) bar.
• Inventory movement — starting inventory plus received minus sold minus damaged equals ending inventory — each movement shown as a bar.
• Headcount or workforce — starting headcount plus hires minus departures minus transfers equals ending headcount.
• Cash flow reconciliation — starting cash balance plus inflows minus outflows equals ending cash balance — a classic treasury management visualisation.

Frequently Asked Questions

What is a waterfall chart used for?

A waterfall chart shows how an initial value is increased or decreased by a series of intermediate values to reach a final total. It is most commonly used in finance to show how revenue builds to profit, in project management for budget analysis, and in operations for inventory reconciliation.

What is a waterfall chart called in Excel?

In Excel 2016 and later it is available as a built-in chart type simply called Waterfall chart. In older Excel versions it was built manually using a stacked bar chart with an invisible baseline section.

How is a waterfall chart different from a bar chart?

A standard bar chart shows each value independently from a shared zero baseline. A waterfall chart shows each value as an incremental addition or subtraction from the running total — bars appear to float, starting where the previous one ended.

What is a bridge chart?

A bridge chart is another name for a waterfall chart — particularly common in management consulting and investment banking where the term "bridge" refers to showing how one financial metric bridges to another.

Can a waterfall chart show negative starting values?

Yes — a waterfall chart can start from any value including negative. Starting bars and ending bars always sit on the x-axis baseline while intermediate floating bars move up or down from the running cumulative total regardless of whether it is positive or negative.

What is an EBITDA bridge?

An EBITDA bridge is a waterfall chart showing how revenue minus cost of goods sold minus operating expenses equals EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation). It is a standard format in M&A presentations and management reporting.

What software can make waterfall charts?

Excel 2016+ has a built-in waterfall chart type. Other tools that produce waterfall charts include Tableau, Power BI, Google Sheets (with add-on or workaround), Python (matplotlib and plotly), and R (ggplot2 with waterfall packages).

What does a floating bar in a waterfall chart mean?

A floating bar in a waterfall chart represents an incremental change value — positive or negative — from the previous running total. The bar does not touch the baseline because it starts at the cumulative total of all previous values, not at zero.