A waterfall chart shows how an initial value is affected by a series of positive and negative changes, arriving at a final total. Each floating bar represents one step—an increase, a decrease, or a subtotal—so your audience sees exactly where the numbers went.
Finance teams use waterfall charts to walk stakeholders through income statements: start with revenue, subtract costs, and land on net income. Product managers use them to explain how churn and expansion revenue combined into net growth. Analysts use them for budget variance analysis—showing planned vs. actual spending line by line.
In this guide, you'll learn what waterfall charts are, when to use them, how to create one step by step, and the mistakes that make waterfall charts confusing instead of clarifying.
What Is a Waterfall Chart?
A waterfall chart (also called a bridge chart, cascade chart, or flying bricks chart) is a data visualization that shows how a starting value changes through a series of intermediate positive or negative values to reach a final value. Each bar "floats" above or below the previous one, connected by thin lines, creating a visual bridge from start to finish.
The concept was popularized by the consulting firm McKinsey & Company in the 1990s for financial presentations. Today, waterfall charts are a standard tool in business intelligence, financial reporting, and any analysis where understanding the step-by-step breakdown of a total is critical.
If you're new to data visualization in general, our beginner's guide to data visualization covers the fundamentals before diving into waterfall charts.
When Should You Use a Waterfall Chart?
Waterfall charts are the right choice when you need to explain how a value changes through sequential steps. They excel at:
- Income statement walk-throughs — Show how revenue minus costs equals net income, with each cost as a separate bar
- Budget variance analysis — Compare planned vs. actual spending, showing which line items were over or under budget
- Revenue bridge analysis — Explain how last quarter's revenue turned into this quarter's through new customers, churn, expansion, and contraction
- Inventory reconciliation — Track opening stock, additions, removals, adjustments, and closing stock
- Profit margin breakdown — Decompose gross revenue into gross profit, operating profit, and net profit through each cost layer
- Year-over-year change explanation — Show each factor that contributed to the difference between two periods
Waterfall charts are not the best choice when you need to compare categories side by side (use a bar chart), track continuous trends over time (use a line chart), show parts of a whole at a single point (use a pie chart or treemap), or explore correlations (use a scatter plot). For help choosing the right chart, see our chart types explained guide.
Waterfall Chart vs. Other Charts: When to Use What?
Waterfall charts overlap with several other chart types. Here's how to decide.
| Question You're Answering | Best Chart | Why Not a Waterfall? |
|---|---|---|
| How does a value change through sequential steps? | Waterfall chart | This is exactly what waterfall charts are built for |
| Which category is largest? | Bar chart | Waterfall bars float, making magnitude comparison harder |
| How does a metric trend over months or years? | Line chart or area chart | Waterfall shows steps, not continuous progression |
| What share does each part represent? | Pie chart or donut chart | Waterfall shows change, not static composition |
| How does a total break down into nested sub-groups? | Treemap | Treemaps show hierarchy; waterfall shows sequential flow |
| What is the data distribution? | Histogram or box plot | Waterfall charts are not designed for statistical distributions |
| Which region has the highest intensity? | Heatmap | Heatmaps show patterns across two dimensions; waterfall is one-dimensional |
How to Create a Waterfall Chart: Step by Step
There are several ways to create waterfall charts, from no-code tools to full programming environments.
Method 1: Use CleanChart (No Code Required)
The fastest way to create a waterfall chart without writing any code:
- Prepare your data with two columns: a label for each step and a numerical value (positive for increases, negative for decreases). Optionally mark start/end totals.
- Go to CleanChart's waterfall chart maker and upload your file
- Map your columns to the step labels and values
- Customize colors for increases (green), decreases (red), and totals (blue or gray)
- Export as PNG, SVG, or PDF for presentations and reports
You can upload data from multiple sources:
- CSV to waterfall chart – Import comma-separated data files
- Excel to waterfall chart – Upload .xlsx spreadsheets directly
- JSON to waterfall chart – Convert structured JSON data
- Google Sheets to waterfall chart – Connect live spreadsheets
If your data needs cleaning before visualization, our complete CSV data cleaning guide walks through the process step by step.
Method 2: Google Sheets
Google Sheets has a built-in waterfall chart type:
- Structure your data with a Label column and a Value column
- Select your data range
- Go to Insert > Chart
- In the Chart editor, change the chart type to Waterfall chart
- Use the Customize tab to adjust colors for positive, negative, and total bars
Google Sheets waterfall charts are functional but limited in styling and subtotal control. For more polished results, export your data and use the Google Sheets to waterfall chart converter. See our Google Sheets to chart tutorial for the full workflow.
Method 3: Excel
Excel 2016 and later versions include a waterfall chart type:
- Organize your data with labels in one column and values in another
- Select your data range
- Go to Insert > Charts > Waterfall
- Right-click any bar and select "Set as Total" for start/end/subtotal bars
- Customize colors using the Chart Design and Format tabs
Excel's waterfall chart is good for quick internal use. However, styling options are limited and exporting at high resolution can be tricky. If you're evaluating options, our Excel vs. online chart makers comparison breaks down the trade-offs. For publication-quality output, see our publication-ready charts guide.
Method 4: Python (Matplotlib / Plotly)
For programmers, Python offers full control over waterfall chart creation:
import plotly.graph_objects as go
labels = ["Revenue", "COGS", "Gross Profit", "OpEx",
"Marketing", "R&D", "Net Income"]
values = [500000, -200000, None, -80000,
-50000, -70000, None]
measures = ["absolute", "relative", "total", "relative",
"relative", "relative", "total"]
fig = go.Waterfall(
x=labels,
y=values,
measure=measures,
increasing={"marker": {"color": "#2ecc71"}},
decreasing={"marker": {"color": "#e74c3c"}},
totals={"marker": {"color": "#3498db"}},
connector={"line": {"color": "#95a5a6"}}
)
fig_layout = go.Figure(fig)
fig_layout.update_layout(
title="Income Statement Waterfall",
showlegend=False
)
fig_layout.write_image("waterfall.png", scale=2)
fig_layout.show()The Plotly waterfall chart documentation covers advanced features like subtotals, custom connectors, and horizontal orientation. If coding isn't your preference, our guide on creating charts without Python covers no-code alternatives.
How to Structure Data for a Waterfall Chart
Waterfall charts need sequential data with labels and signed values. There are two common formats:
Simple Format (Most Common)
Each row represents one step. Positive values are increases, negative values are decreases:
| Label | Value | Type |
|---|---|---|
| Revenue | 500000 | total |
| Cost of Goods | -200000 | relative |
| Gross Profit | total | |
| Operating Expenses | -80000 | relative |
| Marketing | -50000 | relative |
| R&D | -70000 | relative |
| Net Income | total |
The "Type" column tells the chart tool whether each bar is an absolute starting point, a relative change, or a calculated total. Most tools (including CleanChart) can infer totals automatically if you omit the Type column.
Variance Format
For budget variance analysis, structure data as planned vs. actual:
| Category | Planned | Actual | Variance |
|---|---|---|---|
| Salaries | 200000 | 210000 | -10000 |
| Marketing | 100000 | 85000 | 15000 |
| Infrastructure | 75000 | 90000 | -15000 |
| Travel | 30000 | 22000 | 8000 |
Use the Variance column as your waterfall values to show which categories came in over or under budget.
If your data has missing values or formatting issues, clean it first using our guide to handling missing values in CSV files.
Practical Waterfall Chart Examples
Example 1: Income Statement Bridge
A CFO presents quarterly results to the board. The waterfall starts at total revenue ($12M), then subtracts cost of goods sold (-$4.8M), gross margin subtotal ($7.2M), sales and marketing (-$2.1M), R&D (-$1.8M), G&A (-$1.2M), and lands on operating income ($2.1M). The board instantly sees that COGS is the largest cost driver and that operating income is 17.5% of revenue. This type of financial analysis pairs naturally with chart-enhanced business reports.
Example 2: SaaS Revenue Bridge (Quarter over Quarter)
A SaaS company explains how Q4 MRR became Q1 MRR. The waterfall starts at $800K (Q4 ending MRR), adds new customers (+$120K), expansion revenue (+$45K), subtracts churn (-$65K) and contraction (-$20K), and arrives at $880K (Q1 ending MRR). The chart makes it clear that new customer acquisition more than offset churn, driving 10% net growth. For more sales data techniques, see our complete guide to visualizing sales data.
Example 3: Budget Variance Analysis
A finance team reviews annual spending against budget. The waterfall starts at the planned budget ($5M), then shows variances by department: Engineering (+$200K over), Marketing (-$100K under), Sales (+$50K over), Operations (-$30K under), HR (-$20K under), arriving at actual spend ($5.1M). Each bar immediately reveals which departments drove the $100K overage. The team can combine this with a bar chart to show individual line-item details within each department.
Example 4: Headcount Change Walkthrough
An HR director explains annual headcount changes. Starting at 500 employees (Jan 1), the waterfall shows new hires (+120), internal transfers (net 0, shown as two bars), voluntary attrition (-45), involuntary separations (-15), and ending headcount (560 on Dec 31). This sequential breakdown tells a clearer story than simply reporting a net gain of 60 employees.
Waterfall Chart Best Practices
- Use consistent color coding. Green for increases, red for decreases, and blue or gray for totals/subtotals. This convention is so widely understood that deviating from it will confuse your audience. For guidance on choosing effective colors, see our guide on color in data visualization.
- Include subtotals for complex waterfalls. If your chart has more than 6–8 steps, add subtotal bars at logical breakpoints (e.g., Gross Profit between revenue and operating expenses). Subtotals give viewers anchor points and make long waterfalls scannable.
- Label every bar with its value. Floating bars make it hard to read exact values from the axis alone. Place data labels directly on or next to each bar so viewers don't have to estimate.
- Order steps logically, not by size. Unlike bar charts where sorting by value can help, waterfall steps should follow the natural sequence of the process (revenue before costs, beginning balance before transactions).
- Keep connector lines subtle. The thin lines connecting bars help show continuity but shouldn't compete with the bars. Use light gray and keep them thin.
- Start and end with totals. Always anchor the waterfall with a clear starting value and ending value. Without these anchors, viewers lose the frame of reference for the intermediate changes.
Common Mistakes to Avoid
Mistake 1: Too Many Steps
A waterfall with 20+ bars becomes a visual mess. Aggregate small items into "Other" categories or use subtotals to create logical groupings. If you need granular detail, provide it in a supporting table, not in the chart itself.
Mistake 2: Missing or Inconsistent Color Coding
Using the same color for increases and decreases defeats the purpose of a waterfall chart. The visual distinction between positive and negative changes is the core value of this chart type. For colorblind-safe options, see our guide to colorblind-friendly charts—blue/orange pairs work well as alternatives to green/red.
Mistake 3: No Data Labels
Because waterfall bars float at different heights, reading values from the y-axis is unreliable. Without labels, viewers can only estimate. Always include the exact value on each bar, especially for financial presentations where precision matters.
Mistake 4: Using Waterfall Charts for Non-Sequential Data
Waterfall charts imply a flow from left to right. If your data has no inherent sequence (e.g., comparing sales across regions), a standard bar chart is the right choice. Forcing non-sequential data into a waterfall misleads viewers into thinking there's a progression. For guidance on choosing the right chart, see our article on why your chart looks wrong.
Mistake 5: Ignoring Scale
When the starting total is very large and the changes are small, the incremental bars become tiny slivers. Consider using a zoomed-in view that focuses on the changes, or break the waterfall into two charts: one showing the full picture and one showing a detailed view of the changes.
When Should You NOT Use a Waterfall Chart?
Waterfall charts are powerful but specialized. Avoid them when:
- You're comparing unrelated categories — Use a bar chart for side-by-side comparisons
- You want to show trends over time — Use a line chart or area chart
- Your data has no natural sequence — Waterfall implies flow; random-order data is misleading
- You need to show proportions — Use a pie chart, donut chart, or treemap
- You have only two values — A simple before/after comparison doesn't need a waterfall; a bar chart with two bars is clearer
How to Make Waterfall Charts Accessible
Waterfall charts rely on color and position, which can create accessibility challenges. To make yours inclusive:
- Don't rely on green/red alone. Use patterns, hatching, or distinct shades (blue/orange) for colorblind users. Our colorblind-friendly charts guide has specific palette recommendations.
- Add clear data labels to every bar. Screen readers and users with low vision depend on text, not visual position.
- Include a data table alternative. Provide a simple table below the chart showing Label, Value, and Running Total for full accessibility.
- Use descriptive chart titles. Instead of "Q1 Bridge," write "Revenue to Net Income Breakdown, Q1 2026" so the chart's purpose is clear without seeing it.
Frequently Asked Questions
What data format do I need for a waterfall chart?
Waterfall charts need two columns at minimum: a label for each step and a numerical value (positive for increases, negative for decreases). Optionally include a type column to mark starting totals, intermediate subtotals, and ending totals. You can supply this as a CSV file, Excel spreadsheet, JSON file, or Google Sheet.
What is the difference between a waterfall chart and a bar chart?
A bar chart shows independent values side by side, all anchored to the same baseline. A waterfall chart shows how values accumulate—each bar starts where the previous one ended. Bar charts answer "which is bigger?" while waterfall charts answer "how did we get from A to B?"
Can I create a waterfall chart in Excel?
Yes. Excel 2016 and later include a built-in waterfall chart type under Insert > Charts. You can right-click bars to set them as totals or subtotals. However, Excel waterfall charts have limited customization for colors and connectors. For more control, use CleanChart's waterfall chart maker. Our Excel vs. online chart makers comparison covers the trade-offs.
Can I create a waterfall chart from a Google Sheet?
Yes. Google Sheets supports waterfall charts natively. For a more polished result with better export options, use the Google Sheets to waterfall chart converter in CleanChart. Our Google Sheets to chart tutorial walks through the full process.
How many steps should a waterfall chart have?
Aim for 5–12 steps. Fewer than 5 makes the chart unnecessary (a simple table works). More than 12–15 creates visual clutter. For complex breakdowns with many items, aggregate smaller values into "Other" categories and add subtotal bars at logical grouping points.
What colors should I use for a waterfall chart?
The standard convention is green for increases, red for decreases, and blue or gray for totals/subtotals. For colorblind accessibility, substitute blue for increases and orange for decreases. Whatever palette you choose, be consistent throughout the chart. See our color palettes guide for specific recommendations.
What is a bridge chart?
A bridge chart is another name for a waterfall chart. The term "bridge" comes from the visual appearance of the bars forming a bridge from the starting value to the ending value. Bridge charts, waterfall charts, and cascade charts all refer to the same visualization type.
Create Your First Waterfall Chart
Waterfall charts turn complex financial narratives into a single, scannable visual. Whether you're presenting an income statement, explaining revenue changes, or analyzing budget variances, a waterfall chart shows both the big picture and each contributing factor.
Ready to try it? Create a waterfall chart with CleanChart—upload your data from CSV, Excel, JSON, or Google Sheets and get a publication-ready chart in under a minute.
Related CleanChart Resources
- Waterfall Chart Maker – Create waterfall charts online, free
- CSV to Waterfall Chart – Convert CSV files directly
- Excel to Waterfall Chart – Convert Excel spreadsheets
- JSON to Waterfall Chart – Convert JSON data
- Google Sheets to Waterfall Chart – Import from Google Sheets
- Bar Chart Maker – Compare categories side by side
- Line Chart Maker – Track trends over time
- Treemap Maker – Visualize hierarchical composition
- Heatmap Maker – Spot intensity patterns
- Chart Types Explained – Find the right chart for your data
- Visualize Sales Data – Sales chart examples and techniques
- Business Reports with Charts – Professional report design
- How to Create a Treemap – Complete treemap guide
- How to Create a Heatmap – Complete heatmap guide
- Data Visualization for Beginners – Start here
- Color in Data Visualization – Choose effective colors
External Resources
- Wikipedia: Waterfall Chart – History, variations, and terminology
- Plotly Waterfall Chart Documentation – Python reference for programmers
- Microsoft: Create a Waterfall Chart – Official Excel documentation
- Storytelling with Data – Best practices for data communication
- Matplotlib Bar Chart Gallery – Python visualization examples including waterfall patterns
- Investopedia: Waterfall Chart – Financial context and interpretation guide
Last updated: February 11, 2026