How to Create a Waterfall Chart in Excel (Step-by-Step)
Excel has a built-in waterfall chart type — also called a waterfall graph or waterfall diagram — available since Excel 2016. This guide covers the exact steps to create one from scratch, mark the total bars correctly, customize colors for increases and decreases, and handle the multiple-series case that Excel doesn't support natively.
What is a waterfall chart in Excel?
In Excel, a waterfall chart (also called a bridge chart or cascade chart) is a built-in chart type under the Insert menu. You provide a simple two-column table — category and value — and Excel handles the floating bar positions automatically. Positive values appear as increase bars, negative values as decrease bars. You then manually mark your start and end bars as totals so they sit on the baseline rather than floating. Available in Excel 2016, Excel 2019, Excel 2021, Microsoft 365, and Excel for Mac.
6 steps to make a waterfall chart in Excel
Prepare your data
Create two columns: one for category labels (e.g. Revenue, COGS, Gross Profit, Operating Expenses, Net Income) and one for values. Enter positive numbers for increases and negative numbers for decreases. Do not include running totals as values — Excel calculates these automatically. Your start and end bars (e.g. Revenue, Net Income) should contain their actual values, not deltas.
Select your data range
Click and drag to select both columns including the header row. For example, A1:B8 for a seven-step P&L bridge. Make sure no blank rows are included in the selection.
Insert the waterfall chart
Go to Insert → Charts → click the Waterfall, Funnel, Stock, Surface or Radar Chart dropdown → select Waterfall. In Microsoft 365, this dropdown icon shows a small waterfall chart thumbnail. Excel creates the chart with floating bars based on your data. The chart may look incorrect at this stage — that's expected until you mark the total bars in the next step.
Mark the total bars
This is the step most users miss. Right-click the first bar (your starting value, e.g. Revenue) → Format Data Point → check Set as total. The bar drops to the baseline. Repeat for the last bar (e.g. Net Income) and any intermediate subtotals (e.g. Gross Profit, EBITDA). Excel does not auto-detect totals — every total and subtotal bar must be marked manually. If a bar that should sit on the baseline is still floating, it hasn't been marked yet.
Customize the colors
Double-click any bar to open Format Data Series. Set fill colors for each series: green for increase bars, red or orange for decrease bars, gray or navy for total and subtotal bars. Consistent color coding makes direction immediately obvious without requiring readers to check labels.
Add data labels
Right-click the chart → Add Data Labels. This shows the value of each change above or below each bar. To display currency symbols or thousands separators, format the source data cells via Format Cells (Ctrl+1) before inserting the chart.
When to use a waterfall chart in Excel
Financial statements and P&L bridges
The most common use case. A waterfall chart is the standard way to show how revenue becomes net income through a sequence of deductions — COGS, gross profit, operating expenses, EBITDA, D&A, EBIT.
Budget vs actual variance analysis
Show which budget line items caused a variance from plan to actual. Each bar represents one category's over- or under-spend. The end bar shows total variance.
Headcount changes
Start with opening headcount, add hires, subtract departures and terminations, land on closing headcount. Useful for HR reviews and board updates.
Cash flow statements
Opening cash balance → cash receipts → cash payments by category → closing balance. Gives a clear picture of how cash moved through the period.
Components of a waterfall chart in Excel
Start bar
The initial value of your sequence. Sits on the baseline. Must be marked as 'Set as total' via right-click → Format Data Point.
Increase bars
Positive value bars that float upward from where the previous bar ended. Typically colored green.
Decrease bars
Negative value bars that hang downward from where the previous bar ended. Typically colored red or orange.
Subtotal and total bars
Intermediate or final running totals. These connect back to the baseline. Must be manually marked via right-click → Format Data Point → Set as total. Excel will not detect them automatically.
Connector lines
Thin horizontal lines connecting the top or bottom of one bar to the start of the next, showing continuity. Toggle on or off in Format Data Series → Series Options.
Waterfall Chart with Multiple Series in Excel
Excel's built-in waterfall chart type supports a single data series only — one column of positive and negative values. There is no native option to display multiple series (for example, two scenarios side-by-side, or grouped increases and decreases within each bar).
Option 1 — Stacked bar workaround. Build the waterfall structure manually using a stacked bar chart with invisible spacer bars. Each visible bar gets a matching spacer beneath it to position it at the correct floating height. Set the spacer bars' fill to No Fill so they disappear. This approach works but requires careful data setup and is time-consuming for large datasets.
Option 2 — Online stacked waterfall tool. AECharts' stacked waterfall chart maker handles multiple series natively with no spacer-bar workaround. Paste your data, customize colors per series, and export as animated video or static image.
Waterfall Chart Excel Template
Excel doesn't ship with a dedicated waterfall chart template, but once you build one you can save the workbook as a reusable template: File → Save As → Excel Template (.xltx). Future files based on the template will inherit your column layout, color coding, and chart format.
For a faster alternative, AECharts provides ready-made waterfall chart templates online. Paste your data, pick a template, and export as an animated MP4 or static image — no manual formatting required. Useful when you need a polished waterfall diagram for a presentation or report and don't want to rebuild the Excel formatting each time.
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