A waterfall chart is used to show how an initial value is affected by a series of intermediate positive or negative values. The result is a final total. Each column in the chart represents a single data point, and the bars appear to “float,” illustrating how each value contributes to the whole.
This type of chart is especially useful in financial reporting, where it can show how a company’s net income results from a series of additions and subtractions starting from gross revenue. Outside finance, it’s also useful for project cost analysis, inventory audits, and customer journey conversions.