How to Create a Waterfall Chart: Step-by-Step Tutorial

Waterfall charts excel at showing how an initial value increases and decreases through intermediate steps to reach a final value. They're perfect for financial reporting, variance analysis, and understanding how individual factors contribute to overall change.

This tutorial provides tool-specific instructions for 5of10.com (fastest, no signup), Excel, Google Sheets, and other online chart makers, plus troubleshooting guidance for common issues.

Example of a waterfall chart showing cumulative changes

What Is a Waterfall Chart?

A waterfall chart (also called a bridge chart or cascade chart) displays how sequential positive and negative values contribute to a cumulative total. Each column either "floats" above the previous value or "falls" below it, creating a visual cascade effect.

Key Components:

Starting point: The initial value (grounded at zero)
Positive increases: Floating columns that add to the total (typically green)
Negative decreases: Floating columns that subtract (typically red/orange)
Subtotals: Optional intermediate totals (often blue/gray)
Ending point: The final cumulative value (grounded column)

Best Used For:

Revenue breakdown by product line or region
Profit and loss statements (revenue → net income)
Budget vs. actual analysis
Inventory changes over time
Employee headcount changes

Not Ideal For:

Non-sequential comparisons (use bar charts)
Too many categories (>12 becomes cluttered)
Only positive values (simple bar chart works better)

Step-by-Step: Create a Waterfall Chart

Setup: Organize Your Data

Structure data with categories and their positive/negative impacts:

Category          | Value
------------------|---------
Q1 Revenue        | 500
Product A Growth  | +75
Product B Growth  | +50
Product C Decline | -25
New Customer Adds | +40
Churn             | -15
Q2 Revenue        | 625

5of10.com — Quickest Method (No Signup Required)

Why Choose 5of10.com:

No account creation or signup needed
Instant waterfall chart creation in your browser
Export as PNG or SVG with no watermarks
All processing happens locally - your data stays private
100% free forever

Step-by-Step:

Visit 5of10.com/waterfall-chart
Enter your starting value (e.g., "Q1 Revenue: 500")
Add increase and decrease values:
- Product A Growth: +75
- Product B Growth: +50
- Product C Decline: -25
- New Customers: +40
- Churn: -15
The ending total (625) is calculated automatically
Customize colors for increases (green), decreases (red), and totals (blue)
Adjust chart size, fonts, and styling
Click Export as PNG or Export as SVG

💡 Pro Tip: 5of10.com is perfect when you need a quick waterfall chart for presentations or reports without installing software or creating accounts. The SVG export option gives you scalable graphics that look crisp at any size.

Example Output:

Below is an example of a waterfall chart created with 5of10.com showing revenue changes from Q1 to Q2:

Waterfall chart showing Q1 to Q2 revenue progression with increases in green and decreases in red

Excel 2016+ (Windows) / Excel 2019+ (Mac)

As of 2025, waterfall charts are built into Excel 2016+ for Windows and Excel 2019+ for Mac.

Select your data range (including headers)
Insert > Insert Waterfall, Funnel, Stock, Surface or Radar Chart > Waterfall
Right-click the starting column (Q1 Revenue) > Format Data Point > Check Set as Total
Repeat for ending column (Q2 Revenue)
Format colors: Click any increase bar > Format Data Series > Fill (green); repeat for decreases (red)
Add data labels: Click chart > Chart Elements (+) > Data Labels
Customize connector lines: Format Data Series > Fill & Line > adjust color/weight

Excel Tips:

Use Fill Color "Automatic" for each series to apply theme colors
Right-click axis > Format Axis to adjust scale if needed
Save as chart template for reuse: Right-click chart > Save as Template

Google Sheets

Select your data range
Insert > Chart
In Chart Editor, change Chart type to Waterfall chart
Customize tab > Series:
- Set "Up bars" color (green)
- Set "Down bars" color (red/orange)
- Set "Total bars" color (blue/gray)
Add data labels: Customize > Series > Data labels
Adjust connector line style in Customize > Series > Connector line

Google Sheets Note: Start and end totals are usually auto-detected. If not, check Setup tab and adjust data range.

Other Online Tools (Datawrapper, Flourish)

Datawrapper:

Go to app.datawrapper.de > New Chart
Select Range Plot (Datawrapper's waterfall equivalent)
Paste your data or upload CSV
Proceed > Visualize > Customize colors and labels
Publish & Embed (no watermark on free plan)

Flourish:

Go to flourish.studio > New Visualization
Select Waterfall template
Upload data or paste from spreadsheet
Customize in Preview panel
Publish (public on free plan)

Customization Best Practices

Color Conventions

Increases: Green or blue (#4CAF50, #2196F3)
Decreases: Red or orange (#F44336, #FF9800)
Totals: Dark blue, gray, or black (#1565C0, #616161)

Accessibility: Use patterns or textures in addition to colors for colorblind viewers (affects approximately 8% of men). In Excel: Format Data Series > Fill > Pattern fill.

Labels and Titles

Descriptive Title:
❌ "Q1 to Q2 Revenue"
✅ "Q2 Revenue Grew 25% to $625K, Driven by Product A"

Axis Labels:

Y-Axis: "Revenue ($000s)" or "Revenue (in thousands)"
Include data source: "Source: Q2 Financial Statements, 2025"

Data Label Position:

Inside bars for large values
Outside bars for small values
Above increases, below decreases for clarity

Real-World Example: P&L Waterfall

This example shows how a company went from $1M revenue to $150K net profit:

Revenue                 $1,000,000
- Cost of Goods Sold      -600,000
= Gross Profit            $400,000
- Operating Expenses      -180,000
- Marketing                -50,000
- R&D                      -30,000
+ Interest Income          +10,000
= Net Profit              $150,000

What This Reveals:

60% of revenue goes to COGS (largest decrease)
Operating expenses are the second biggest cost
Company maintains 15% profit margin
Visual impact immediately shows where money is spent

This format is commonly used in financial presentations and consulting reports to visualize how revenue flows to net profit through various cost categories.

Advanced Options (Overview)

Subtotals for Long Sequences

For charts with many categories, add intermediate subtotals:

Q1 Revenue → [5 changes] → Gross Profit → [5 changes] → Net Profit

Mark subtotals as "Set as Total" so they ground to baseline, breaking the visual into digestible chunks. This is particularly useful for P&L statements with 15+ line items.

Color Coding by Department

Instead of simple red/green:

Blue for Sales-related changes
Orange for Marketing changes
Green for Product changes

This adds categorical dimension while maintaining waterfall structure. In Excel, format each bar individually: Right-click bar > Format Data Point > Fill.

Combining Time Periods

Show monthly changes with quarterly subtotals:

Jan Start → Feb → Mar → Q1 Total → Apr → May → Jun → Q2 Total → Year End

This works well for dashboards showing year-to-date progress with intermediate checkpoints.

Troubleshooting Common Issues

Problem: Increase bars start from zero instead of floating
→ Solution: Ensure starting value is marked as "Set as Total" (Excel) or verify data range includes starting value (Google Sheets)

Problem: Total doesn't match sum of changes
→ Solution: Check your data calculations. Each intermediate value should equal previous + change. Use =SUM() formulas to verify.

Problem: Connector lines are missing
→ Solution: In Excel, Format Data Series > Fill & Line > Line > enable connectors. In Google Sheets, check Customize > Series > Connector line.

Problem: Categories appear in wrong order
→ Solution: Reorder your data table—waterfall charts display in row order. For time series, ensure chronological sorting.

Problem: Bars are too thin or overlap
→ Solution: Adjust Gap Width in Excel (Format Data Series > Series Options) or resize chart dimensions.

Waterfall Chart Limitations

When Alternatives Work Better:

Too few categories (2-3): Use grouped bar chart for clearer comparison
Too many categories (>12): Break into multiple charts or use stacked bar
Need precise value reading: Floating bars make exact values harder to read than grounded bars
Only showing percentage breakdown: Use stacked 100% bar chart instead

Conclusion

Waterfall charts transform complex financial flows into intuitive visual stories. They answer "How did we get from A to B?" better than almost any other chart type.

The key is proper setup: organize data sequentially, use clear colors and labels, and don't overcomplicate. With the tool-specific instructions and troubleshooting guide above, you can create waterfall charts that immediately communicate insights.

Next Steps: For the quickest start, try 5of10.com/waterfall-chart with no signup required. Or use the sample data structure above to create your first waterfall chart in your preferred tool, then apply it to your own financial or variance data.

Social Snippets:

Twitter: "Waterfall charts turn complex financial flows into visual stories. Quick guide: ✅ Try 5of10.com (no signup) ✅ Set start/end as totals ✅ Green (up) + red (down) ✅ Add connector lines ✅ Label every value Full tutorial with 5of10.com, Excel & Google Sheets steps →"

LinkedIn: "Financial analysts: If you're still showing revenue-to-profit flows in spreadsheet tables, you're making stakeholders work too hard. Waterfall charts visualize cumulative changes instantly. This tutorial covers tool-specific steps for 5of10.com (fastest, no signup), Excel, Google Sheets, and online platforms, plus troubleshooting for the 5 most common issues →"