Excel Waterfall Charts: Business Examples of Waterfall Charts and When to Use Them in Your Reports

Oct 27, 2016
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Lecture summary: Excel Waterfall Charts: Real Business Examples of Waterfall Charts used in Corporate Reports & When to use Waterfall Charts. i.e. for Which visualization purposes are Waterfall Charts good for.

The Waterfall chart is common in finance, but you can use it for any variable or statistic that goes through changes which can be positive or negative depending on the change. Where the waterfall is not so effective is when you have parts-to-whole relationships. (see this video for a better option: http://www.xelplus.com/use-this-instead-of-the-pie-chart/)

For which cases is the waterfall chart good for? Two cases:
1. You need to explain a change that occurred from one time period to another. For example how did the earnings change (e.g. EBIT) from last year to this year and which factors where responsible for this change
2. You want to explain how you got from point A to point B within the same time period. For example how you went from gross sales to net income in the same month.

The Waterfall is also not just financial figures. You can use it to explain changes in statistical data, for example changes in headcount – how many new employees were hired, how many resignations or retirements your company had during the year.

One feature that makes the Waterfall a good story teller is the connectors. These connectors, connect the bars – the delta bars to one another – they have the effect of grouping the bars – which visually indicate that they belong together – they are all a part of the same story. In this video you will see a few different Waterfall charts used in the real business world. Each of these Waterfall charts were created in Excel.
You can create these in ANY version of Excel you have.

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