What it is
A waterfall chart shows how a value changes through a sequence of positive and negative contributions. Each bar starts where the previous one ended; rises and falls get different colours, and the total is drawn as a full bar at the end.
Finance teams use it to explain how revenue becomes profit, how a budget changed between years, or how a cash balance moved through a quarter.
✓ Use it when
- Your data is a starting value followed by changes: income, then costs; last year’s figure, then the effects that changed it.
- You want to show which items drove the change between two totals.
✗ Avoid it when
- The values are independent amounts, not changes — use a bar chart.
- There are dozens of changes — group the small ones.
Tips for a better chart
- Start with the opening value as a positive amount; Chart Buffet adds the closing total for you.
- Use one colour for increases and one for decreases, consistently.
- Label each bar with its change, and the total with its value.
The maths
With running totals Sk = Σi≤k vi, bar k floats from Sk−1 to Sk; its length is |vk| and its direction is the sign of vk. The final bar spans from 0 to Sn, the total.
The thin connectors between bars trace the running total, so the eye can follow the balance from step to step.
A little history
Waterfall charts were popularised in business presentations by consultants at McKinsey & Company, whose long-serving director of visual communications, Gene Zelazny, set out the firm’s charting practice in Say It with Charts (Zelazny 1985). They are also called bridge charts, for the way they bridge two totals.
Questions
How do I add a subtotal?
At the moment Chart Buffet adds one total at the end. For a subtotal, split the chart in two.
Why is my first bar not on the ground?
Make the first row your starting value as a positive amount; every later bar floats from where the previous one ended.
References
- Zelazny, G. (1985). Say It with Charts: The Executive’s Guide to Successful Presentations. Homewood, IL: Dow Jones-Irwin.
- Wikipedia contributors (2026). Waterfall chart. Wikipedia.