Creating a waterfall chart in Excel might seem like a daunting task, but it’s easier than you think. A waterfall chart is a type of data visualization that helps you understand the cumulative effect of sequentially introduced positive or negative values. It’s a great tool for financial analysis, inventory control, or any situation where you need to track the incremental impact of changes over time. In just a few steps, you’ll be able to transform your raw data into a clear and informative chart.
Step by Step Tutorial: Creating a Waterfall Chart in Excel
Before we dive into the steps, let’s talk about what we’re going to achieve. By the end of this tutorial, you’ll have a beautiful waterfall chart that clearly shows the progression of your data. Whether you’re tracking profits, expenses, or inventory levels, this chart will give you a visual representation of where you started, the changes along the way, and where you ended up.
Step 1: Set up your data
Arrange your data in a column with labels in the first column and values in the second column.
When setting up your data, make sure that your starting value is at the top, followed by the positive or negative values that you want to track. The final row should be your end value. It’s important to have your data organized this way to ensure that the chart is accurate and easy to understand.
Step 2: Insert a stacked column chart
Select your data and go to the ‘Insert’ tab, then choose ‘Stacked Column’ from the ‘Charts’ group.
Once you’ve selected your data, inserting a stacked column chart is as simple as a couple of clicks. This type of chart is the foundation of your waterfall chart, as it allows for the visualization of the cumulative effect of your data points.
Step 3: Convert to a waterfall chart
Right-click on the chart, choose ‘Change Chart Type,’ and then select ‘Waterfall.’
After creating a stacked column chart, converting it to a waterfall chart is just a matter of finding the right option in the ‘Change Chart Type’ menu. Excel has a built-in waterfall chart type, which makes this step a breeze.
Step 4: Format the chart
Adjust the colors of the columns to differentiate between increases, decreases, and total.
Formatting the chart is where you can get creative. By changing the colors of the increases to green and the decreases to red, for example, you make your chart more intuitive and visually appealing. You can also adjust the total column to stand out, ensuring that the end value is clearly visible.
Step 5: Add data labels
Click on the chart elements button (the plus sign), and check ‘Data Labels’ to display the values on your chart.
Adding data labels is the final touch that brings your waterfall chart to life. These labels provide the exact values for each column, making your chart not only visually appealing but also informative.
After following these steps, you’ll have a fully functional waterfall chart that provides insights into your data’s progression. This chart will allow you to quickly and efficiently communicate the story behind the numbers.
Tips for Creating a Waterfall Chart in Excel
- Ensure your data is accurate and in the correct order before creating the chart.
- Use contrasting colors for increases and decreases to make the chart easy to read.
- Customize the data labels to display the information that is most relevant to your audience.
- Utilize the ‘Format Data Series’ option to adjust the gap width for a cleaner look.
- Experiment with different chart styles and formats to find the presentation that best suits your data.
Frequently Asked Questions
What is a waterfall chart used for?
A waterfall chart is used to visualize the cumulative effect of sequential positive or negative values, often for financial analysis or inventory tracking.
Can I create a waterfall chart in all versions of Excel?
Waterfall charts are available in Excel 2016 and later versions. For earlier versions, you can create a similar effect manually using stacked column charts and formatting.
How do I differentiate between increases and decreases in my waterfall chart?
You can format the columns in different colors, typically green for increases and red for decreases, to differentiate them visually.
Can I add totals to my waterfall chart?
Yes, you can add totals by including them in your data set and formatting the total column to stand out within the chart.
How do I change the data labels on my waterfall chart?
Click on the data labels, then use the formatting options to customize their appearance, such as the font size, color, and the values they display.
Summary
- Set up your data with starting and ending values.
- Insert a stacked column chart using your data.
- Convert the chart to a waterfall chart type.
- Format the chart for clarity and visual appeal.
- Add data labels for detailed information.
Conclusion
Creating a waterfall chart in Excel isn’t as challenging as it seems. With the right data and a few simple steps, you can convey complex data transformations in a straightforward and visually engaging way. Remember to check your data, play around with formatting for the best presentation, and utilize data labels to provide detailed insights. Whether you’re presenting to a team, analyzing financial trends, or just trying to make sense of changing data, a waterfall chart is a potent tool. So, go ahead, give it a try, and watch as your data comes to life in a new and meaningful way.
Matthew Burleigh has been writing tech tutorials since 2008. His writing has appeared on dozens of different websites and been read over 50 million times.
After receiving his Bachelor’s and Master’s degrees in Computer Science he spent several years working in IT management for small businesses. However, he now works full time writing content online and creating websites.
His main writing topics include iPhones, Microsoft Office, Google Apps, Android, and Photoshop, but he has also written about many other tech topics as well.