How to Create a Waterfall Chart in Excel

A waterfall chart shows how a starting value changes through positive and negative steps until it reaches an ending value. It is useful for budget variance, profit bridges, revenue changes, cost analysis, and any story where the movement matters as much as the final number.

Use a waterfall chart when a simple bar chart hides the path from beginning to end.

Set up the source table

Step 1. Create two columns: Category and Amount.

Step 2. Put the starting value in the first row.

Step 3. Add increases as positive numbers and decreases as negative numbers.

Step 4. Put the ending total in the final row.

Step 5. Select the table and choose Insert -> Waterfall Chart.

Step 6. Right-click the first and last bars and choose Set as Total.

Excel will float the intermediate bars so readers can see each increase or decrease.

Example: explain restaurant profit movement

Suppose a restaurant starts with $85,000 in monthly sales. Food costs, labor, delivery fees, rent, and other expenses move the business down to operating profit.

The table might include:

That chart makes the margin story easier to explain than a list of expenses. It also pairs well with a small business budget for restaurants because managers can compare planned and actual cost bridges.

Make the chart readable

Keep labels short. Put detailed explanation in the sheet, not inside every chart label.

Use one chart for one story: profit bridge, variance bridge, cash movement, or headcount change. If you try to explain several movements in one waterfall chart, the chart becomes a puzzle.

Common waterfall chart mistakes

The Griddy way

Waterfall charts are easy to make once the table is shaped correctly, but the shaping step is where many reports break.

"Turn this restaurant budget into a waterfall chart table that shows sales, major costs, and operating profit"

Griddy can organize the source rows, group small costs, and help build a chart-ready bridge from the numbers already in the workbook.

Reconcile every step

A waterfall chart should reconcile from its opening total to its closing total. Label each increase, decrease, and subtotal, and verify that the source values add up before formatting the chart. Decide whether the bridge is explaining a period change, a budget variance, or a walk from revenue to profit; mixing these meanings makes the visual hard to audit. Keep a small reconciliation table beside the chart so a reviewer can trace every bar back to a source row.

Sources

• Microsoft Support: Available chart types in Office
• Microsoft Support: Create a chart from start to finish