Excel Waterfall Chart Example: Build One Step by Step

An Excel waterfall chart shows how a starting value changes through a series of increases and decreases to reach an ending value. For a simple example, enter an opening cash balance of 100, add receipts of 40, subtract payments of 25 and tax of 10, and finish at 105; insert a Waterfall chart, then mark the opening and closing bars as totals.

A simple waterfall chart example

Use this small cash-flow example to see the chart’s logic. In Excel for Microsoft 365 on Windows, enter the following data in cells A1:B6:

A1: Category; B1: Amount
A2: Opening cash; B2: 100
A3: Customer receipts; B3: 40
A4: Supplier payments; B4: -25
A5: Tax paid; B5: -10
A6: Closing cash; B6: 105

The intermediate balance moves from 100 to 140 after receipts, down to 115 after supplier payments, and down to 105 after tax. With the opening balance in B2 and the three changes in B3:B5, you can calculate the closing balance in B6 with =B2+SUM(B3:B5). The result is 105, matching the example. This formula is useful because the closing number updates when you change any of the underlying amounts.

The opening and closing rows represent balances, while the middle rows represent changes. That distinction matters: the opening and closing values should appear as full-height total bars, rather than as additional movements that Excel stacks onto the running balance.

How to create the chart in Excel

Once the data is arranged with categories in one column and amounts in the next, create the chart from the selected range. These steps are for the Microsoft 365 desktop app on Windows:

Select A1:B6, including the column headings.
Choose Insert > Insert Waterfall, Funnel, Stock, Surface or Radar Chart > Waterfall. In some ribbon layouts, the chart button appears in the Charts group with a shorter label such as Insert Waterfall or Stock Chart.
Excel inserts a chart based on the selected categories and values. If the chart is selected, use Chart Design to change its title, layout, or other chart options.
Mark Opening cash and Closing cash as totals, as described in the next section. This is essential for a clear start-to-finish bridge.

Excel for Mac has a Waterfall chart type in current desktop editions, although the ribbon placement and wording can vary by release. Look on the Insert tab for the chart-type controls. The same chart concept applies: select the category and amount columns, insert a Waterfall chart, and set the balance bars as totals. In Excel for the web, available chart editing controls can differ from the desktop app, so use the desktop version if a needed chart option is missing.

Set opening, closing, and intermediate totals

Excel needs to know which bars are complete balances and which bars are changes. In the example, the opening value of 100 is the base. Receipts and payments then move the running balance. The final value of 105 is the result after all those movements. Setting the first and last data points as totals makes those bars start at the chart’s baseline; the intervening bars float between their previous and new balances.

To set a bar as a total, click the chart, then click the individual bar again so that only that data point is selected. Right-click it and choose Set as Total. Repeat for the other total bar. If the right-click menu does not show the command, check that you selected one bar rather than the entire data series. A selected individual point typically has handles around that point rather than around every bar.

Use the same command for a subtotal in the middle of a longer analysis. For example, a business might show starting revenue, several product or region changes, a subtotal for a business unit, then further changes and a final revenue total. Marking the subtotal as a total makes it a new anchor for the next movements. It does not change the source value in the worksheet; it changes how that point is drawn in the chart.

How to read the bars

A waterfall chart is sometimes called a bridge chart because each change connects one balance to the next. In the cash example, the opening cash bar rises from zero to 100. The receipts bar rises from 100 to 140. The supplier-payments bar falls from 140 to 115, and the tax bar falls from 115 to 105. The closing cash bar then spans from zero to 105.

Excel normally distinguishes increases, decreases, and totals with different default fills. The exact colors can depend on the workbook theme. Read the category labels and values as well as the colors: color alone is not a reliable explanation of the business meaning, particularly if someone changes the chart formatting or prints it without color.

Waterfalls are most useful when the order of changes explains the result. A revenue bridge might begin with last year’s revenue, then show price increases, volume changes, lost customers, and other effects before arriving at this year’s revenue. Reordering the changes may preserve the final arithmetic but alter the visual path. Choose an order that reflects the question being explained, and label the categories so readers understand what each movement represents.

Make the chart easier to understand

A chart can be numerically correct and still be hard to interpret. Keep the title specific, make category labels short enough to read, and show the amounts when the exact changes matter. To add labels, select the chart and choose Chart Design > Add Chart Element > Data Labels, then select a suitable label position. If labels overlap or crowd narrow bars, try a different position or show labels only for the most important points.

Consider these practical improvements:

Use a title such as Cash balance bridge rather than the generic Chart Title.
Include units in the title or axis context, such as Amounts in thousands, and ensure readers know whether negative numbers are shown as outflows, costs, or another kind of decrease.
Use concise category names. If labels are long, widen the chart or shorten the text in the source cells without making the meaning vague.
Keep the source data and chart close together, and retain the underlying values in the worksheet so readers can verify the calculation.
Use colors with enough contrast and do not rely on color alone to distinguish increases from decreases.

For a presentation or report, explain whether the figures are actual amounts, estimates, or percentages. A waterfall chart can show percentage-point changes or other measures, but the meaning of the unit must be explicit. It is not automatically a cash-flow statement, nor does Excel validate whether the categories add up according to your accounting rules.

Common problems and how to fix them

The last bar floats instead of showing the ending balance. Select that point and choose Set as Total. Do the same for the opening balance if Excel is treating it as a movement.
The chart shows a strange running level. Check that increases are positive and decreases are negative, and confirm that the category order matches the intended sequence. Verify the closing calculation against the source values.
The chart includes blank categories or an unwanted series. Select only the category and amount columns needed for the chart. If the layout is wrong, use Chart Design > Select Data to inspect the chart’s source range.
Negative values appear to increase the result. Check the signs in the worksheet. A payment entered as positive will be drawn as an increase unless the data is changed or otherwise represented.
Labels or category names are difficult to read. Increase chart width, shorten labels, or reduce the number of displayed labels. A long list of tiny movements may be clearer as a table or as a simplified chart with related items grouped.

A frequent misconception is that Excel automatically recognizes every opening balance, subtotal, or ending balance from its label. It does not infer that a row called Closing cash is a total just because of the wording. Inspect the bars and explicitly set the relevant points as totals.

When a waterfall is better than other chart types

A waterfall chart is a good choice when the reader needs to understand how several positive and negative contributions produce a final result. It emphasizes the sequence and cumulative effect of changes. A clustered column chart is usually easier for comparing separate values, such as sales across regions, because each column begins from the same baseline. A line chart is generally more suitable for showing a measurement changing over time, especially when the sequence is continuous.

A waterfall is not automatically the best choice for every financial or operational summary. If there are dozens of small changes, the chart can become crowded. If the values are independent rather than cumulative, floating bars may suggest a relationship that does not exist. Grouping minor items into a clearly named category can help, but do not hide important components just to make the chart look neat.

Frequently Asked Questions

How do I show a total in an Excel waterfall chart?
Select the individual bar, right-click it, and choose Set as Total. Use this for opening balances, ending balances, and any intermediate subtotal that should begin at the chart baseline.

Can I use formulas as the source for a waterfall chart?
Yes. Excel charts can use worksheet cells whose values come from formulas. For example, the closing cash formula in B6 calculates 105 from the opening amount and changes; the chart uses that calculated result as its closing total.

Why does my Excel waterfall chart not add up?
Check whether decreases are entered as negative values, whether the categories are in the intended order, and whether the opening, closing, or subtotal bars are correctly set as totals. Also compare the final bar with a worksheet calculation.

Can I add a subtotal in the middle of the chart?
Yes. Add a row for the subtotal in the source data, then select that point in the chart and choose Set as Total. Later changes can then continue from that subtotal.

Can I make a waterfall chart in Excel for Mac?
Current desktop versions of Excel for Mac include a Waterfall chart type. The ribbon layout may differ from Windows, but the key tasks are the same: select the data, insert the chart, and mark balance points as totals.

For a first chart, keep the data to a few meaningful movements, verify the arithmetic in the worksheet, and explicitly mark the start and finish as totals. Once that structure is clear, you can add subtotals or more categories without losing the bridge from the opening value to the ending result.

Try it: the Percentage Formula Generator: percent of, percent change, increase and decrease, with the formula.

More in Charts & pivot tables

Sources: Function behaviour and menu paths: Microsoft Support documentation for Excel. Method & sources

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