Waterfall Chart
A waterfall chart shows how an initial value is affected by a series of positive and negative changes. Also called a bridge chart, cascade chart, or McKinsey chart.
Interactive waterfall chart example
What is a Waterfall Chart?
A waterfall chart is a form of data visualization that shows how an initial value is affected by a series of intermediate positive or negative values, leading to a final cumulative value. The bars appear to "float" between the starting and ending points, creating a bridge-like visual that makes it easy to understand which factors drive the change.
The format was popularized by McKinsey & Company in the 1990s because it solves a specific communication problem: explaining complex financial breakdowns to executives who need to understand profit drivers without reading through spreadsheets. Three decades later, waterfall charts appear in virtually every consulting engagement involving financial analysis.
Also Known As:
When to Use Waterfall Charts
Waterfall charts excel in three key scenarios
Explaining Change Over Time
Show how revenue, profit, or any metric changed from one period to another by breaking down contributing factors.
- Year-over-year revenue variance
- Quarter-over-quarter profit changes
- Budget vs. actual performance
Breaking Down Components
Visualize how a starting value transforms into an ending value through sequential additions and subtractions.
- Revenue to net income walks
- Cost structure breakdowns
- Margin analysis (Gross → Net)
Gap Analysis
Highlight the gap between current state and target, showing what factors contribute to the shortfall or surplus.
- Sales pipeline vs. quota
- Headcount actual vs. plan
- Market share current vs. target
When NOT to Use Waterfall Charts
Showing category composition
Use pie chart or 100% stacked bar instead
Comparing multiple entities
Use grouped bar chart instead
Displaying trends over many periods
Use line chart instead
Changes happen simultaneously
Use bar chart with annotations instead
Waterfall Chart Example
A revenue bridge showing year-over-year change drivers
How to Create a Waterfall Chart
There are several ways to create waterfall charts, each with different trade-offs between ease of use, customization, and professional quality:
In Excel
Excel includes native waterfall charts since 2016. Good for basic charts but limited customization for connector lines and stacked variants.
Excel waterfall chart guide →In PowerPoint
PowerPoint has limited native support. For professional consulting charts, most users rely on add-ins like Deckary or think-cell.
PowerPoint waterfall chart guide →With Deckary
Create professional waterfall charts in seconds with automatic formatting, Excel linking, and consulting-grade styling. Free to try.
Try Deckary free →In Power BI / Tableau
Business intelligence tools include waterfall charts for dashboards and reports. Good for dynamic data but less control over presentation styling.
Create Professional Waterfall Charts
Stop wrestling with Excel formulas and manual shapes. Deckary creates consulting-grade waterfall charts in seconds with automatic formatting and Excel linking.
Waterfall Chart FAQ
Common questions about waterfall charts