In a nutshell, use a waterfall chart whenever you want to show how a starting value increases or decreases through a series of positive or negative changes. Showing product value over a period of time.Analyzing inventory or sales over a period of time.Highlighting budget changes on a project.

Other examples of quantitative analyses, where waterfall charts are used, include:

Waterfall charts are popular in the corporate and financial environment because they are very useful for a visualization of the positive and negative movements within a measured quantity or KPI, such as your Monthly Net Profit or Cash Flow. Some people like to connect the lines between the contributions to make the chart look like a bridge (giving us the bridge chart name), while others leave the columns floating. Note: Other fun names for waterfall charts include Mario chart and flying bricks chart, because individual chart elements resemble an old arcade game. The floating columns between them are the contributing positive or negative values. In a waterfall chart, the first column is the starting value and the last column is the end value. In other words, it's an ideal way to visualize a starting value, the positive and negative changes made to that value, and the resulting end value. A waterfall chart (also known as a cascade chart or a bridge chart) is a special kind of chart that illustrates how positive or negative values in a data series contribute to the total.

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