Excel Waterfall Charts: How to Create and Format Them

In Microsoft Excel for Microsoft 365, select a table of categories and values, then choose Insert > Insert Waterfall, Funnel, Stock, Surface or Radar Chart > Waterfall. Excel creates a chart showing how positive and negative changes move a starting value toward an ending value; mark any opening, closing, or subtotal bars as totals so they begin at the correct baseline.

What an Excel waterfall chart shows

A waterfall chart, sometimes called a bridge chart, explains how a sequence of changes adds to or subtracts from a starting amount. Unlike a standard column chart, where each bar usually compares an independent value from zero, most waterfall bars float: their position depends on the running total after the preceding categories.

For example, a company might start with revenue of $100,000, add $30,000 from one product, lose $12,000 from another, gain $18,000 from a new customer, and lose $6,000 from refunds. The chart makes the path from the opening $100,000 to the closing $130,000 visible. In Excel, increases, decreases, and totals are commonly distinguished with different colors, while connectors help readers follow the cumulative movement.

This chart is useful when the order of changes matters and the audience needs to understand the components behind a final result. It is less useful for comparing many unrelated categories or showing a trend over time; a bar or line chart may communicate those tasks more clearly.

Prepare the source data

Arrange the data in two columns: a category label and a numeric value. Use one row for the starting amount, one row for each change, and a final row for the ending amount. A simple example looks like this:

Opening balance — 100
Product A — 30
Product B — -12
New customer — 18
Refunds — -6
Closing balance — 130

With the opening value in B2 and the changes in B3:B6, the closing balance in B7 can be calculated with =B2+SUM(B3:B6). The result is 130: 100 plus 30, minus 12, plus 18, minus 6. This layout assumes the labels are in A2:A7 and the corresponding values are in B2:B7. Keep the closing value in the source table even though Excel needs an extra instruction to display it as a total.

Use consistent units and make the signs meaningful: increases are positive and decreases are negative. Avoid inserting blank rows inside the data range, and give each row a concise label. If your source data contains percentages, time durations, or currency, format the cells appropriately before building the chart; the number format helps keep labels readable and consistent.

Create a waterfall chart in Excel

Select the category and value cells, including their column headings. For the example, select A1:B7 if the headings are in row 1.
On the ribbon, choose Insert > Insert Waterfall, Funnel, Stock, Surface or Radar Chart > Waterfall.
Excel inserts a chart on the worksheet. Check that the category labels appear in the intended order and that positive and negative changes are represented correctly.
Set the opening and closing balance bars as totals. Right-click each relevant bar and choose Set as Total. The bars should then start at the chart baseline rather than float as ordinary changes.
Use the chart title and labels to explain the measure, period, and units. For instance, use Revenue bridge, FY2026, $ thousands rather than a vague title such as Results.

The menu wording can be presented as a combined chart-type button, and its position or appearance may vary slightly with window size and Excel updates. In current Excel for Mac, use the Insert tab and choose the Waterfall chart type from the chart options; ribbon placement can differ from Windows. If the Waterfall option is missing, check that you are using a version of Excel that supports the chart and, if necessary, open the workbook in the desktop app.

Set opening balances, closing balances, and subtotals

Excel cannot infer from the number alone that a row represents a complete balance rather than another change. When you mark a point as a total, Excel anchors that bar to the horizontal axis, making it a full-height reference value. This is essential for the first and final bars in a typical bridge chart.

To set one, click the chart and then click the specific bar once to select the series and again to select that individual data point. Right-click the selected point and choose Set as Total. Repeat for each opening balance, ending balance, or subtotal that should start at zero. If you select the whole series rather than an individual bar, the total command may not apply to the intended point.

Subtotals are useful in a longer explanation, such as showing gross profit after revenue and costs, followed by operating expenses and net income. They interrupt the running sequence with a clearly anchored checkpoint. A row that is merely an intermediate increase or decrease should remain a floating bar. If the chart looks wrong after source values change, verify the total settings: Excel’s designation is a chart setting, not a conclusion it recalculates from the value.

Format labels, colors, and axes

Make the chart legible before adding decoration. Select the chart and use Chart Design > Add Chart Element to add a chart title, axis titles, or data labels. Exact available label positions depend on the chart and Excel version. Data labels are helpful when readers need precise amounts, but too many labels can overlap in a chart with many categories. Consider labeling the important changes and totals, or enlarging the chart area.

Waterfall charts normally use separate visual treatments for increases, decreases, and totals. You can select an individual bar and use the formatting controls to change its fill, or adjust the series options to suit your design. Choose colors with clear contrast and do not rely on color alone to explain the story: descriptive category labels, a useful title, and a visible axis scale also matter. Keep the same color meaning throughout a report, and check that the choices remain distinguishable for readers with color-vision differences.

Use number formats that match the data. Currency labels may need a currency symbol, while a chart measured in thousands should say so in its title or axis title. The vertical axis can be formatted through the axis context menu and Format Axis pane. Because a waterfall chart communicates cumulative movement, an axis that hides relevant changes or uses an unexplained scale can mislead. Avoid truncating the axis merely to make modest differences look dramatic.

Read the chart and choose the right use case

Read a waterfall from left to right. A floating bar shows the size and direction of one change, and its position shows the running balance before and after that change. A total bar resets the visual reference to the baseline. The connector between bars indicates how the cumulative value carries forward; it is not a separate data value.

Good applications include explaining budget variance, reconciling beginning and ending cash, showing how a forecast changes from a prior estimate, or breaking down customer growth into additions and losses. For example, a headcount bridge could begin at 240 employees, add 18 hires, subtract 7 departures, and end at 251. The same structure can explain operating profit as long as the signs and category definitions are explicit.

Use a different chart when the reader’s main question is different. A clustered bar chart is better for comparing several teams across the same measures. A line chart is generally better for a continuous time trend. A waterfall is strongest when the central question is how a starting figure became an ending figure through a sequence of contributions.

Common problems and how to fix them

The first or last bar floats. Select that individual point and choose Set as Total. Repeat for any subtotal that should be anchored.
Increases appear as decreases. Check the signs in the source data. A reduction should normally be a negative number, and an increase a positive number.
The closing balance is incorrect. Reconcile the starting value plus all changes with the reported ending value. Look for omitted categories, duplicated rows, or mixed units. The chart will display values as supplied; it does not verify the business logic.
Labels are missing or crowded. Add data labels from Chart Design > Add Chart Element > Data Labels, then remove unnecessary labels or make the chart wider. Long category names can also be shortened in the source labels.
Colors or connectors are hard to interpret. Use a restrained, consistent palette and ensure the chart is large enough to distinguish adjacent bars. Check that the title explains the measure and time period.
New rows do not appear. Confirm that the chart’s source data range includes the added rows. Selecting the chart and adjusting its data range through Chart Design > Select Data can help; structured Excel tables can also make source ranges easier to extend.

A frequent misconception is that Excel automatically treats the first and final values as totals. It may create a waterfall from the selected data, but the chart can interpret those values as changes until you mark the appropriate points. Always inspect the baseline behavior before sharing the chart.

Frequently Asked Questions

Does Excel have a built-in waterfall chart?
Yes. Current Microsoft Excel for Microsoft 365 includes a native Waterfall chart type. Select the source data and choose it from the Insert tab’s chart options; then mark balance and subtotal points as totals where needed.

How do I make the first bar start at zero?
Click the first bar as an individual data point, right-click it, and choose Set as Total. If it still floats, make sure the individual bar—not the whole series—was selected.

Can I use negative numbers in an Excel waterfall chart?
Yes. Enter decreases as negative values and increases as positive values. Excel uses the sign to show the direction of each change, while the sequence of values determines the cumulative path.

Can a waterfall chart show subtotals?
Yes. Add a subtotal row to the source data and mark its bar as a total. Subtotals can divide a long bridge into understandable stages, but each should represent a meaningful checkpoint and should not be counted again as an additional change.

Why does my chart not update when I add data?
The new rows may be outside the chart’s selected source range. Check the range through Chart Design > Select Data, or use an Excel table as the source so added rows are easier to include. Also confirm that the workbook is not showing an outdated chart selection or cached external data.

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

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

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