# 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](https://en.wikipedia.org/wiki/Waterfall_chart) 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.

## Waterfall Chart FAQ

Common questions about waterfall charts

### What is a waterfall chart?

### When should I use a waterfall chart?

### What is the difference between a waterfall chart and a bridge chart?

### Why are waterfall charts popular in consulting?

### How do I create a waterfall chart?  
  Complete guide