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.

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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:

Bridge chart — Bridges the gap between start and end values
Cascade chart — Values cascade from one to the next
Flying bricks chart — Floating bars resemble suspended bricks
McKinsey chart — Popularized by McKinsey & Company

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.

In PowerPoint

PowerPoint has limited native support. For professional consulting charts, most users rely on add-ins like Deckary.

With Deckary

Create professional waterfall charts in seconds with automatic formatting, Excel linking, and consulting-grade styling. Free to try.

In Power BI / Tableau

Business intelligence tools include waterfall charts for dashboards and reports. Good for dynamic data but less control over presentation styling.