# How to Create a Waterfall Chart in Excel

In this lesson, you will learn how to insert a waterfall chart.

## What is a waterfall chart?

The waterfall chart is an interesting example of a chart in Excel where you can see the effect of positive and negative data on the result (in most cases, net profit).

This is a very effective and simple thing to do in the Excel chart. A waterfall chart can be used, for example, to show the revenue and expenditure of a personal or business venture. A more ambitious application is to show a profit and loss business. It is simpler to display your own income and expenditure in the monthly budget. You have more difficult examples. The waterfall chart will show the individual components of the profit and loss (simplified). Subsequently, we consider:

• total revenues,
• cost of sales of products,
• Gross profit on sales,
• management costs,
• Cost of sales,
• other operating costs,
• financial costs,
• net profit.

## How to Insert a Waterfall Chart in Excel?

Start with the data. Create a table with sample amounts of revenues, expenses, and net profit calculation. (The table is formatted like an accountant's.)

In the second column, enter the calculated residual profit. It is through the remainder of the profit rise, 'waterfall' on the chart. For example, the remaining profit for the financial cost is the sum of the financial cost and the cells below, or net profit.

Now create a stacked column chart. The legend will not be needed, so remove it immediately.

For now, the chart does not look like a waterfall. To change this, click on one of the blue columns (Excel ticks all) and format the column. A dialog box appears, where you should select 'No fill'.

To make it look like a waterfall chart in the same dialog box, in the 'Series Options' tick 'Gap Width' at 0% ('No Gap').

For an even more attractive graph, format the column with the revenue and profits by setting the fill color to green.

Just a few trinkets and a graph and it will be ready. Add data labels, and change the scale on the axis of the chart.

The waterfall chart is ready. Isn't it true that it is interesting? It looks different from the commonly used types of charts, and it is very readable. In the same way, the waterfall chart can be used to illustrate your monthly budget.