The waterfall chart is the single most under-used chart type in finance. The pattern is: a start value, a series of positive and negative contributions, an end value. The senior uses the waterfall on every P&L bridge, every cash bridge, every variance review. The four examples below are the ones we ship most often.
The four examples
P&L bridge - prior year to current year
Prior year actual → +Revenue growth → -COGS increase → -Opex increase → +Other income → -Tax → Current year actual
The most common waterfall in any finance team. The senior ships this on the month-end close and the quarterly review. The chart shows where the profit changed and why.
Cash bridge - opening to closing
Opening cash → +Operating cash flow → -Capex → -Debt repayment → +Debt drawdown → -Dividends → -Working capital → Closing cash
The cash bridge shows how the cash balance moved from the start to the end of the period. The senior uses this for the cash position report and the lender update.
Revenue variance - budget to actual
Budget → +Volume variance → +Price variance → +Mix variance → +New products → -Lost customers → Actual
The revenue variance bridge shows where the actual revenue differed from the budget and why. The senior uses this for the monthly variance review and the sales operations meeting.
Headcount bridge - opening to closing
Opening headcount → +Joiners → -Leavers → +Transfers in → -Transfers out → +Promotions → Closing headcount
The headcount bridge shows how the team size moved from the start to the end of the period. The senior uses this for the HR monthly review and the workforce planning model.
How to build a waterfall from scratch
The native Excel 2016+ waterfall handles simple bridges. For full control, the senior uses the stacked-bar approach below. The three steps are the same for every bridge.
1. Build the data table
Column A: category name. Column B: value (positive for inflows, negative for outflows). Column C: running total. Column D: base = MAX(0, prior running total) for positive values, MAX(0, current running total) for negative values. The base is the invisible spacer.
2. Insert a stacked bar chart
Select the data → Insert → Bar Chart → Stacked Bar. The chart shows the base, the positive, and the negative series stacked on top of each other. The base is invisible (no fill), the positive is green, the negative is red.
3. Format the chart
Set the base series fill to no fill. Set the positive series fill to a muted green. Set the negative series fill to a muted red. Add data labels to the positive and negative series. Hide the legend if it is too long. The senior uses a single accent colour for total bars (start and end).
What the senior-built waterfall looks like
The senior-built waterfall is muted, not bright. The start and end bars are a dark accent colour (slate, navy). The positive bars are a muted green. The negative bars are a muted red. The base is invisible. The data labels show the value of each bar. The legend is hidden - the colours carry the message. The chart sits on the dashboard tab with a one-line caption above it. The reader sees the bridge in five seconds, the message in thirty.
