How to Create a Waterfall Chart in Google Sheets

The waterfall chart in Google Sheets is helpful when you need to show how values add or subtract from a certain starting value.

Waterfall charts are useful for fluctuating data such as monthly net cash flow, stock price changes, or quarterly budget changes. 

The waterfall chart gets its name from the way it’s shaped. The first bar usually starts at a baseline of 0. The next few bars usually rise and fall towards the baseline, ending with a final bar. This final bar represents the ending quantity.

The waterfall chart is widely used in finance to break down the positive and negative movements that lead to a final net value. 

Let’s take a look at a quick example of a scenario where we can use the waterfall function.

Let’s say we have a tracker that records all the sources of income you have in a month and the amount of expenses you pay monthly. Using a waterfall chart, it’s now easier to visualize the cumulative effect of every entry in the tracker. 

For example, you may notice that your highest income stream comes from your current place of employment, but you make twice as much because of passive income from other sources. You also notice that your utility bills take up most of your monthly expenses.

This personal use case is just one way to use the waterfall chart in Google Sheets. Other practical use cases include managing stocks or inventory, visualizing company growth and attrition, or keeping track of active tasks for project management.

The waterfall chart is an excellent way to show the complexity that may sometimes be overlooked when comparing a starting and ending value. For example, let’s say you’re in charge of Human Resources at your company. 

The number of employees currently working in Department A is still the same number as it was at the start of the year, but this fact may not tell the full story. Perhaps ten people quit throughout the year, and you had to hire seven more and have 3 transferred from Department B.

Now that we know several examples of when to use a waterfall chart, let’s take a deeper look into a spreadsheet with a real example of it in use.

 

 

A Real Example of Using a Waterfall Chart in Google Sheets

Let’s look at a real example of how we can use a Waterfall Chart in Google Sheets.

The example below shows how we can visualize our income and expenses using a waterfall chart. Using formatting options, we color-coded the different movements as well. In the green positive entries, we can easily see that our main job covers most of our income. On the other hand, our utilities cost the most out of all our expenses.

Example of waterfall chart in google sheets

 

Note that there is a subtotal bar at the very end. This bar is a useful marker of how much cash we still have after all our income and expenses are accounted for.

You can make your own copy of the spreadsheet above using the link attached below. 

If you’re ready to try out the waterfall chart in Google Sheets, let’s learn how to write it on our own.

 

 

How to Create a Waterfall Chart in Google Sheets

In this section, we will go through each step needed to make a waterfall chart in Google Sheets. This guide will show you how to visualize our income and expenses tracker, as seen in the previous section.

 

Follow these steps to start creating your own waterfall chart:

  1. First, let’s select the table we’ll be using as our data source. In this example, we’ll select the range A1:B8 which has our income/expense data.
    dataset of expenses and income
  2. Next, we’ll select the Chart option, which we can find under the Insert menu.
    Insert a chart waterfall chart in google sheets
  3. Afterward, you will find a chart editor panel on the right-hand side of your workspace. Make sure that the Chart type is a Waterfall chart. You can find the option under the Other category.
    select waterfall chart in google sheets
  4. Under the Customize tab, you can add labels to the various types of components. For example, you can can label positive movements as “Income” and negative movements as “Expenses”.
    Edit labels in waterfall chart
  5. In the Customize tab, we can change the fill color of our positive and negative movements.
    Edit color formatting
  6. After setting it up, we’re left with the final waterfall chart!
    final waterfall chart result

 

 

Frequently Asked Questions (FAQ)

  1. When should I use a waterfall chart?
    Waterfall charts are a variation of a bar chart that works best to show the specific components of change. This is particularly useful if you want to highlight any particular component of change. Doing this is more difficult in an ordinary bar chart or line chart. 
  2. What are the drawbacks of a waterfall chart?
    Waterfall charts make it a bit difficult to compare between components of change since they’re “floating” in the air, unlike a bar graph. It may also be difficult to show change if the initial value is much larger than the changes. For example, it may be difficult to see a change of $20 when our initial value starts at $10,00. 

That’s everything you need to know to start using the waterfall chart in Google Sheets. This step-by-step guide shows how easy it is to visualize positive and negative effects to a certain value. 

The waterfall chart is just one of many visualization options in Google Sheets. With so many Google Sheets functions out there, you can surely find one that fits your use case.

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