12/11/2023 0 Comments Waterfall chart![]() ![]() One complicating factor is that sometimes the “baseline” of these component bars is at the top of the bar (if that component is showing a negative value), when other times it is at the bottom of the bar (for positive values). The concept is simple, but because we’re not used to seeing bars floating in space, audiences can sometimes find it challenging to interpret the waterfall at a glance. The appearance, then, is of a staircase moving up and down, connecting two (or more) pillars. Put another way: for the pieces in the middle of a waterfall chart, the end of the previous bar is the baseline of the next one. (Or, if you prefer: the “before” and “after” values.) The baselines of the component bars between these totals are all different, and are dependent on whatever the running total is. This is still the case in a waterfall chart, but it only applies to the first bar that shows the initial value, and the last bar that shows the final value. One of the very few golden rules of data visualization is that your bar charts all have to have a common baseline of zero. Compared to a bar or a line chart, the waterfall chart tells me a more complete (and possibly alarming) story. If I am in human resources, and I see that last year in January your department had 20 people in it, and this year in January your department still has 20 people in it, it doesn’t necessarily look like anything interesting has happened.īut if I can visually represent every component of the change in staffing levels over the course of that year, then I can show you that in fact, 15 people quit during the year, and to balance that out we had to hire 10 new people and transfer in five from another department. The waterfall chart is a good way to show the complexity that can sometimes be hidden in our cumulative numbers. Then, there are a series of smaller bars, seemingly floating in space (often rising to a peak, and then falling down towards the baseline), leading up to one final bar, which represents the ending quantity of our chosen measure, and (like the first bar) starts from the zero baseline of our x-axis. Usually, the first bar in a waterfall chart starts from a baseline of zero, and represents the initial quantity of the measure in question. The waterfall chart gets its name from its shape. Instead of just showing a beginning value in one bar and an ending value in a second bar, a waterfall chart dis-aggregates all of the unique components that contributed to that net change, and visualizes them individually. The following example is from storytelling with data. In this article, we are going to demystify the waterfall chart: explain what it is, when we should use it, how to read one, and ways to avoid common pitfalls when creating our own.Ī waterfall chart is a specific type of bar chart that reveals the story behind the net change in something’s value between two points. Outside of those use cases and/or those industries, however, they’re seen infrequently, if ever. So, if we happen to have a workshop where the attendees are from the financial services or insurance sectors, or work in human resources, then attendees are likely familiar with the waterfall chart. ![]() One reason this happens is because waterfall charts are very effective in specific use cases-typically, showing the positive and negative components of change-and are frequently relied upon in particular industries. If, at this point, somebody in the room says, “Actually, I’ve never heard of a _ chart before,” you can almost always fill in the blank with the word “waterfall.” You’ve probably seen all of these before.” And as you can see there aren’t any really unusual charts here. 99% of the time, one of the visuals you see here will get your message across effectively. In our workshops, we often put a grid of a dozen charts up on the screen, and say to the participants, “Most of the charts you’ll need to communicate effectively in business are right here on the screen. So whether you’re learning this for the first time, reading to reinforce core principles, or looking for resources to share with others-like our comprehensive chart guide -please join us as we revisit and embrace the basics. The success of many visualizations is dependent on a solid understanding of basic concepts. ![]() We believe it’s important to take an occasional pulse on foundational knowledge, regardless of where you are in your learning journey. We’ve covered much of the content in previous posts, so this series allows us to bring together many disparate resources, creating a single source for your learning. This month, we build on our “explain the change” challenge, as we bring you another article from our back-to-basics series called what is…?, where we break down some common topics and questions posed to us. ![]()
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