The Benefits of Waterfall Charts

Waterfall charts are a type of graph that is used to show how an initial value is affected by a series of positive and negative values. In this article, we will discuss the benefits of using waterfall charts. Keep reading the learn more about this particular waterfall graphing tool.

What are waterfall charts?

Waterfall charts are a great way to visualize how different parts of your business work together. The chart comprises stacked bars, with the height of each bar representing the value for that category. The bars start at the bottom, adding data as it flows upwards.

One of the most significant benefits of waterfall charts is that they make it easy to see how your business is performing. You can use them to track profits over time. When you track your earnings over time, the waterfall charts will give you a clear picture of whether your business is growing or shrinking and where you might need to make changes. Waterfall charts can also help you track your budget. You can use them to see how much money you have left in your budget and how much money you have spent.

Waterfall charts can also help you spot data analysis trends. For example, if your profits have been steadily increasing for the past few months, you might want to investigate what caused this change and see if you can keep it going. Alternatively, if your expenses have been rising for the past year, you might want to find ways to cut back on spending.

How do you make a waterfall chart?

The best way to make a waterfall chart is by using Excel. Excel is a powerful tool for managing data and creating charts and graphs. It can be used for simple tasks, like making a budget, or for more complex tasks, like building a detailed marketing analysis. With Excel, you can easily create custom data tables and graphs, which can help you better understand your data and make better business decisions. To create a waterfall chart in Excel, you must have at least two data series.

Enter the data for your first data series in column A. Column A will be the data that cascades down the chart. Next, enter the data for your second data series in column B. Column B will be the cumulative values. In cell C2, enter the formula =C1-B1. This unique formula will calculate the cumulative values based on the data in columns A and B. Copy the formula in cell C2 down to the bottom of the data set, select the data in columns A and C, and insert a waterfall chart.

What industries use waterfall charts?

Waterfall charts are used in many industries, including finance, accounting, and project management. The finance industry uses waterfall charts to track the progress of a project and to ensure that all the money is accounted for. Waterfall charts are often used in accounting to track and display the cumulative effect of inflows and outflows of cash over some time. Waterfall charts are used in project management to show the sequence of tasks and how they are related. Waterfall charts are a graphical tool used in marketing management to display how a particular marketing initiative will affect different parts of the business.


A waterfall chart is an important tool for displaying the cumulative effect of sequential changes in a data set. It is beneficial for highlighting how individual contributions aggregate to form an overall trend. When used correctly, waterfall charts provide a clear and concise visual representation of data that can be used to make better business decisions.

Article by Born Realist