⬇️ A Guide to Waterfall Charts A waterfall chart shows how an initial value changes step-by-step through a series of positive and negative changes, leading to a final value. It helps highlight the specific changes that affect a result by breaking them down into stages. --- When to Use It: Waterfall charts are most useful when you want to see how different parts add up (or subtract) to reach a total. Common applications include: - Finance: Showing the move from total revenue to net profit. - Project Management: Tracking changes in a project's scope that affect the timeline. - Performance Reviews: Identifying where gains or losses happen in different areas. --- Good Waterfall Charts: - Clear Labels: Each step should be clearly named so viewers understand what each bar represents. - Consistent Colors: Use one color for increases and another for decreases to make the chart easier to read. - Starting Point: Include a starting line or reference number so viewers know where the chart begins. - Connecting Lines: Use horizontal lines to connect the end of one bar to the start of the next, making the flow easier to follow. Bad Waterfall Charts: - Confusing Order: Avoid arranging bars in a way that makes the changes hard to follow. - Too Many Colors: Don't use too many colors, which can make it difficult to see the differences between increases and decreases. - No Context: Always provide a starting point or explanation to ensure the final number makes sense. --- Pros (What It's Great At) - Connecting Lines: Use horizontal lines to connect the end of one bar to the start of the next, making the flow easier to follow. - Clear Story: Waterfall charts tell a straightforward story of how different changes lead to the final result. - Easy Comparison: They help you see which changes have the biggest impact on the outcome. --- Cons (Where It Falls Short) - Too Complex with Many Items: If there are too many changes, the chart can become cluttered and hard to understand. - Needs Good Design: Without proper labels, colors, and order, the chart can become confusing instead of helpful. --- Bottom Line: Waterfall charts are a great tool to visualize how different changes contribute to a final number. They make it easier to follow the path from the starting point to the end by clearly showing each step. To get the most out of them, focus on designing charts that are easy to read and understand, helping you gain valuable insights. ---
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