The Waterfall Chart is one of the most effective and intuitive ways to illustrate change. It shows the total change, along with a breakdown of the individual components that have driven this change. Typically, it is used to represent a financial change — e.g. YoY changes in sales.

WaterFall Charts aren’t part of PowerPoint default selection of Chart Types. However, we can easily create one using a Stacked Column Chart.

Here’s how.

Start with create a generic chart in PowerPoint. Add enough data points and label them to your needs.  In the example below, we’ll create a Waterfall Chart showing YoY Sales Growth. Observe the x-axis labels. ‘A,’ ‘B,’ and ‘C’ will later be our component bars.

Next, we want to make some quick adjustments to this chart. Change the ‘Chart Type’ to ‘Stacked Column.’

Also, adjust the ‘Gap width’ between the bars to be minimal (e.g. 10). Note that ‘Gap width’ is found under the ‘Options’ tab within the ‘Format Data Series’ window.

Remove one of the data sets, so we are only left with 2 stacked columns.

Now, to create the “waterfall” illusion, color the lower/bottom column with “no fill.” This lower column will determine how elevated the bar is from the x-axis.

Adjust your numbers as needed to create your Waterfall Diagram. I recommend removing the extraneous chart features, as well, e.g. grid lines, legend, etc.

I like to ungroup my chart, so I have more flexibility and control over the look and feel. Oftentimes, different colored bars are used and dashed lines are added to accentuate the change.

Here’s a fancier example.

You can download all the PowerPoint Waterfall Charts used in this PowerPointing tutorial from learnPPT:
http://learnppt.com/downloads/waterfallcharts/

To learn more about different types of charts, a very  comprehensive resource is the Become a PowerPoint Guru book.  It details and explains appropriate chart usage across the wide array of different types of data composition (e.g. item comparison, time series, frequency, correlation, etc.).

You can also download a free PowerPoint plugin called Flevy Tools that creates commonly used consulting diagrams here: http://flevy.com/powerpoint-plugin.  Flevy Tools allows you to dynamically generate Gantt Charts, Harvey Ball diagrams, approach diagrams, and other diagrams.  For the time being, it’s a completely free download.

Questions, thoughts, concerns?  Go to my site (learnppt.com) and shoot me an email.

For pre-made PowerPoint diagrams used in business presentations and other powerpointing needs, browse our library here: learnppt.com/powerpoint/.  These diagrams were professionally designed by management consultants. Give your presentations the look and feel of a final product made by McKinsey, BCG, Bain, Booz Allen, Deloitte, or any of the top consulting firms.