Waterfall chart

A waterfall chart is a form of data visualization that helps in understanding the cumulative effect of sequentially introduced positive or negative values.

Waterfall charts were popularized by the strategic consulting firm McKinsey & Company in its presentations to clients.

[1][2] Complexity can be added to waterfall charts with multiple total columns and values that cross the axis.

[3] A waterfall chart can be used for analytical purposes, especially for understanding or explaining the gradual transition in the quantitative value of an entity that is subjected to increment or decrement.

[4] Waterfall charts are also commonly used in financial analysis to display how a net value is arrived at through gains and losses over time or between actual and budgeted amounts.

An example of waterfall charts. Here, there are 3 total columns called Main Column1, Middle Column, and End Value. The accumulation of successive two intermediate columns from the first total column (Main Column1) as the initial value results in the 2nd total column (Middle Column), and the rest accumulation results in the last total column (End Value) as the final value.
A waterfall chart showing profitability analysis.
Waterfall chart showing profitability analysis
Inventory analysis using waterfall chart
Inventory analysis using waterfall chart