A waterfall chart is a data isualization tool used to track and visualize the cumulative effect of sequential changes in a value. The chart typically displays data in a series of steps, each step in the sequence represented by blocks or columns. The height of each block or column corresponds to the value at that step. Waterfall charts are often used to track and visualize the cumulative effect changes in a value. Keep reading to learn more about what is a waterfall chart and how to use it.
Waterfall Charts
A waterfall chart is a data visualization tool that helps track the cumulative effect of sequentially introduced positive or negative values. The chart typically has two axes: the horizontal axis represents time, and the vertical axis measures the magnitude of change or other quantity.
Values plotted are represented by stacked bars, with each bar representing the value at a given point. The width of the bar represents the proportion of change from one point to the next.
Waterfall charts often visualize financial data, such as revenue and expenses over time or stock prices. They can also visualize any data with multiple stages or components, such as sales pipeline data or product development progress.
Understanding Waterfall Charts
Waterfall charts, also known as cascade charts, visualize how a particular value is affected by a series of intermediate values. Each column in the waterfall chart represents intermediate values, while the last column represents the final value. The height of each column represents the relative contribution of that value to the absolute value.
Waterfall charts are a great way to show how different parts of a process or system interact.
In a waterfall chart, each block represents an additional step in the process, and blocks are connected by lines to show how the output of one step becomes the input of the next. Each block or column represents a value, and the bars extending from the columns represent the sequence of changes in that value.
A waterfall plot represents values of successive data points displayed as subsequent blocks. Waterfall charts can depict any sequence of mutually exclusive and exhaustive data points. Mutually exclusive points are points that cannot occur at the same time. For example, the data “Monday” and “Tuesday” are mutually exclusive because they cannot both occur on the same day.
Exhaustive data are points that cover all possibilities. For example, the data points “Monday” and “Tuesday” are exhaustive because they cover all of the days of the week.
Downward-pointing arrows represent negative values, and upward-pointing arrows represent positive values. The height of each bar represents the magnitude of change for that particular value.
Types of Waterfall Charts
Depending on the visualized data, you can use different waterfall charts.
The most common type of waterfall chart is the additive waterfall chart.
The values are added together in this waterfall chart type to create the total.
This type of waterfall chart is most commonly used to visualize financial data.
The subtractive waterfall chart is a less common type of waterfall chart.
In this waterfall chart type, the values are subtracted from the total instead of being added together.
This type of waterfall chart is most commonly used to visualize process data.
The percent waterfall chart is a type of waterfall chart used to visualize percentages.
In this type of waterfall chart, the size of the bubbles represents the percentage value.
This waterfall chart type is most commonly used to visualize data broken down by category.
Waterfall charts can be a valuable tool for visualizing data. They can show the cumulative effect of sequentially introduced positive or negative values or visualize the different stages of a process. A waterfall chart is essential because it allows you to see how a particular value changes over time as it passes through various stages. This can help understand how a process works and identify any potential issues.
