A waterfall chart is a form of data visualization that helps in determining the cumulative effect of sequentially introduced positive or negative values. The waterfall chart is also known as a flying bricks chart or Mario chart due to the apparent suspension of columns (bricks) in mid-air. Often in finance, it will be referred to as a bridge.
The waterfall chart is normally used for understanding how an initial value is affected by a series of intermediate positive or negative values. Usually the initial and the final values are represented by whole columns, while the intermediate values are denoted by floating columns. The columns are color-coded for distinguishing between positive and negative values.
A waterfall chart can be used for analytical purposes, especially for understanding or explaining the gradual transition in the quantitative value of an entity which is subjected to increment or decrement.
Creating Waterfall Charts
Microsoft Excel can be used to create waterfall charts. The data is column B in the following table shows what one typically starts with.
However, to create a waterfall chart, the data must be converted to a table, such as the one shown in columns D to G above. The resulting waterfall chart is then created by making a stacked column chart and changing the column color for the column under the increasing and decreasing amounts to no fill.
The following chart results:
Because waterfall charts are usually far more complex, often cross the X axis and extensive labeling is needed, use of macros or add-ins to create the charts simplifies the process.
- "How to Create a McKinsey-style waterfall chart". Idea transplant.
- Ethan M. Rasiel. The McKinsey Way. McGraw–Hill, 1999.
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