Creating a Waterfall Chart

Waterfall Charts have become popular recently - particularly where I work.  They are useful for showing the movement between two points.  Revenue and the Costs associated with generating that revenue to produce an end position - EBIT.  They can be used to show the difference between two scenarios or how the numbers changed between scenario A and scenario B.  

The following is an example of a very simple waterfall.  It is really easy to update; simply change the headers, the figures and the chart should take care of itself.  I use this one whenever I need a fast waterfall that has to be done 'yesterday'.  I have found some waterfall chart examples difficult to update and follow but this should allow everyone to produce waterfalls quickly and easily.

 he Chart is essentially a stacked Bar Chart with the lower part of the chart made the same colour as the chart itself.  So the white area underneath each of the coloured areas is a chart too, it is just that you can't see it.   The Colours in the Chart are not created automatically which is a pain if you have a list which will change constantly.  Fortunately for a P&L style chart like the one we have above all items in the P&L will fall into one of the shown categories so the categories will remain static.

The following is an example of presenting the difference between an EBIT at a point in Time and EBIT at one point in time.  Handy for showing the difference between two versions of a corporate plan, Budget first cut and Budget second cut.

The formula which sits behind this version is a bit more complex but it should just be a matter of substituting your data for the data which is contained within the file.  The following Excel file shows the above Waterfall chart example.  Use it as a template.