A waterfall chart is a graphical representation of cumulative sequential data in the form of vertical rectangles that represent positive or negative values. The columns are placed along the x axis in an order that may or may not be dictated by time or another quality. These columns are labeled in accordance with the data and values they represent.
Waterfall charts are also referred to as bridges, flying bricks, or Mario charts. This is due to the fact that they resemble a bridge, or the bricks of the Super Mario video game that appear to be suspended in air. Waterfall charts are believed to have been popularized by the consulting firm McKinsey & Company. They utilized the charts in presentations for clients.
These charts clearly show the effects of values on other values. This has applications in many areas, but it is most heavily employed in the realm of business and finance to analyze and express common tasks and qualities such as inventory, quarterly profit, and more.
In a waterfall chart, each column is placed in a location that is related to the preceding column. Assume that you begin with a column of positive value. If the next column is positive, it will rise from the seating at the level of the top of the first column; but if it is negative, it will fall from that same level. If two negative values occur, the negative column which follows a negative column will fall from the level of the first column's bottom.
The rises and falls of columns within a waterfall chart plot the measured values of the graph's stated data. They are placed at appropriate locations which reveal the quantity of the graph's data as a result of the negative or positive value's effect. Each column represents the specific value that alters that data.