What Is a Waterfall Chart? Definition, Examples, and How to Make One (2026)
A waterfall chart shows a running total as values are added and subtracted, so you can see how a starting figure becomes an ending figure. Columns float between the two totals, color-coded by direction, which makes it the standard way to explain a variance rather than just report it.
Finance teams call it a bridge chart, because it bridges one number to another: last year's revenue to this year's, or budget to actual. This guide covers what it is, when it earns its place, how to build one in Excel, and the formatting steps people get wrong.
What is a waterfall chart?
It is a column chart where most columns do not start at zero. The first column rises from the axis to the starting value. Each column after that begins where the previous one ended and moves up or down by the size of its contribution. The final column drops back to the axis to show the ending total.
The visual effect is a staircase descending or climbing across the plot area, with each step labeled by what caused the movement. Positive and negative contributions get different colors, so the direction of each step reads at a glance without checking the axis.
Two properties define the form:
- Cumulative positioning. Every intermediate column is anchored to the running total, not to zero.
- Anchored totals. Start and end columns sit on the axis so the two endpoints are directly comparable.
Get either wrong and the chart stops being a bridge and becomes a confusing bar chart.
What it's used for
Revenue bridges. Opening revenue, then columns for new business, expansion, contraction, and churn, ending at closing revenue. This is the single most common use in SaaS reporting.
Budget variance. Budgeted figure on the left, actual on the right, with each driver of the gap as a step in between. It answers "why are we off by $340,000" in one image.
P&L walks. Revenue down through cost of goods, operating expenses, and taxes to net income. Each deduction is a downward step.
Headcount and inventory movement. Opening balance, additions, departures, closing balance. Any quantity with a beginning state, discrete movements, and an ending state fits the form.
Cash flow. Opening cash, operating, investing, and financing flows, closing cash. The categories are already signed, so the chart practically builds itself.
The common thread: a starting value, a set of discrete signed contributions, and an ending value. If your data does not have those three parts, this is not the right chart.
How to read one
Floating bars
The bars in the middle are suspended. A column that starts at $4.2M and ends at $4.8M represents a $600K contribution. The height is the change; the vertical position shows where in the sequence it happened. Reading the top of a floating bar as an absolute value is the most common misreading.
Color as direction
Increases and decreases use different fills. Excel applies this automatically, and it is the fastest signal on the chart — you can count red steps without reading a single label.
Total columns
Start and end columns are grounded at zero and usually get a third color. These are the only bars whose height equals an absolute value. Subtotals inserted mid-sequence work the same way.
Connector lines
Thin lines link the end of one bar to the start of the next, making the running total continuous. They are on by default in Excel and worth keeping — without them the eye has to reconstruct the sequence.
Waterfall chart vs other chart types
| Chart type | Shows | Use when |
|---|---|---|
| Waterfall | How a start value becomes an end value through signed steps | You need to explain a change, not just show one |
| Clustered column | Values side by side across categories | You are comparing independent categories |
| Stacked column | Composition of a total at one point in time | The parts sum to a whole and none are negative |
| Line | A continuous trend over time | Many time points, no discrete drivers to attribute |
The closest call is against a stacked column. Use stacked when the parts add up to a whole at a single moment. Use the bridge form when the parts are movements between two moments, especially when some are negative. Stacked columns handle negatives badly.
How to make a waterfall chart in Excel
Excel has had this as a built-in chart type since Excel 2016, on both Windows and Mac. The honest sequence looks like this.
Lay out the data. One column of labels, one column of values. Enter decreases as negative numbers. Include your starting and ending totals as their own rows.
Insert the chart. On Windows, select the range, then Insert → Insert Waterfall, Funnel, Stock, Surface or Radar Chart → Waterfall. You can also go through Recommended Charts → All Charts. On Mac, select the range, then on the Insert tab choose the waterfall icon and pick Waterfall.
Anchor the totals. This is the step everyone misses. Excel treats every column as a floating change by default, so your start and end totals will hang in mid-air. Click once to select the series, then click again to select the single total column. Right-click, choose Format Data Point, and tick Set as total. Repeat for each total or subtotal. Clearing the box reverses it.
Adjust the connector lines. They appear by default. To turn them off, right-click a data series, open Format Data Series, and clear Show connector lines. Check it again to bring them back.
Format. Use the Chart Design and Format tabs to set colors and labels. If those tabs are not visible, click inside the chart to bring them onto the ribbon.
Microsoft's own create a waterfall chart page covers the same steps with screenshots.
Where the manual route gets tedious
None of that is hard. It gets tedious in three places: signing every decrease correctly, setting each total individually on every rebuild, and reformatting when next month's data adds a category. For a chart you build once, Excel is fine. For one you rebuild monthly from a fresh export, the setup repeats every cycle.
How to build one with Powerdrill Bloom
If the data is already in a spreadsheet and you want the visual without the formatting pass, an AI chart tool skips the middle.
Step 1: Upload your data
Drop in the Excel, CSV, or TSV file holding your figures. Multiple files load together, so a budget file and an actuals file can be compared in one pass without a manual join. Column detection and cleanup happen on upload.
Step 2: Describe the chart in natural language
Say what you want the chart to explain: "build a waterfall from Q1 revenue to Q2 revenue, broken out by new, expansion, contraction, and churn." The agent picks the series, signs the movements, and anchors the totals. Ask for a different breakdown and it rebuilds rather than making you reformat.
Step 3: Export the chart, report, or deck
Take it out as an image, fold it into a written report, or convert the whole canvas into a slide deck in one click. Professional, Business, and Fancy styles all export to PowerPoint or Notion. See the AI graph maker for the other chart types available from the same upload.
Common mistakes
Forgetting to anchor the totals. A floating start column is the most frequent error, and it makes the whole chart wrong. Set every total and subtotal explicitly.
Too many steps. Beyond roughly eight or nine movements the staircase turns into noise. Group the small contributors into an "other" step and name the ones that matter.
Unsorted middle steps. Order the movements by size or by a logical sequence. Random ordering forces the reader to work out the story themselves.
Mixing units. Every step has to be in the same unit as the totals. A chart that walks from revenue in dollars through a step measured in percentage points is not a bridge.
Unlabeled steps. The height shows the size; only the label explains the cause. A bridge without labels is a shape.
The short version
A waterfall chart earns its place whenever the question is "what changed and why." It is the wrong pick when the question is "how big is each category." Excel builds one natively in a few clicks, as long as you remember to anchor the totals. That one setting separates a working bridge from a broken column chart.
If you rebuild the same chart every month from a fresh export, the formatting is the part worth automating. Try Powerdrill Bloom free — upload the spreadsheet, describe the bridge you want, and export it straight to a deck. For other visuals from the same data, see how to turn a CSV file into a chart and the data visualization tool.
Frequently asked questions
What is a waterfall chart used for?
It explains how a starting value becomes an ending value through a series of positive and negative contributions. Typical uses are revenue bridges, budget-versus-actual variance, profit and loss walks, cash flow movement, and headcount changes over a period.
Is a waterfall chart the same as a bridge chart?
Yes. Bridge chart is the common name in finance, and Mario chart shows up occasionally as informal shorthand for the floating-bar look. All three describe the same form: cumulative floating columns between two anchored totals.
Does Excel have a built-in waterfall chart?
Yes, since Excel 2016 on both Windows and Mac. Select your data, then choose the waterfall option from the Insert tab. You will need to mark start and end rows with Format Data Point → Set as total. Excel treats every column as a floating change by default.
How do I show negative values correctly?
Enter decreases as negative numbers in your source data. Excel then draws them as downward steps and applies the decrease color automatically. Entering decreases as positive values produces a chart that climbs when it should fall.
How many steps should a waterfall chart have?
Keep it under about eight or nine movements between the two totals. Past that the steps get too thin to read and the labels collide. Roll small contributors into a single "other" category and give the named steps room.