How to Create a Waterfall Chart in Tableau

Waterfall charts are visuals that display the positive and negative contributions of the dimension members to the total value. Each positive member of the dimension adds up to the running total and each negative member of the dimension deducts from the running total.

It is a data visualization technique that shows how an initial value can be affected by the cumulative effect of sequential positive and negative values. This chart can be used to show either sequential or categorical data.

These intermediate values can either be time-based or category based. The waterfall chart is also known as a flying bricks chart or Mario chart due to the apparent suspension of columns (bricks) in mid-air.

The Waterfall Chart can give insight into how to minimize risks and losses, while simultaneously maximizing value and gains. Waterfall Graphs help you see the pictures behind the numbers even when your dataset is large and complex.

The waterfall chart gets its name from its shape. Usually, the first bar in a waterfall chart starts from a baseline of zero, and represents the initial quantity of the measure in question. 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.

The waterfall chart is a good way to show the complexity that can sometimes be hidden in our cumulative numbers. Compared to a bar or a line chart, the waterfall chart tells baselines a more complete (and possibly alarming) story.

Advantages of Using Waterfall Chart

• A waterfall chart can be used for analytical purposes for understanding or explaining the gradual transition in the quantitative value of an entity that is subjected to increment or decrement values.

• It is usually used to show the profit between two periods.

• It is also used to show changes in cash flow or income flow statements.

• This is commonly used in explaining the year-over-year growth in business.

• Sometimes these charts are also used for tracking demographic changes in a business.

The waterfall chart is often seen in human resources, to show attrition and growth in hiring. It is also commonly used in the financial industry, to show credits and debits, gains and losses, over the course of a single period of time; and in industries where keeping a running tally of active accounts or subscriptions—or revenue from these—are core to the business.

Disadvantages Of using Waterfall Chart

• Waterfall charts ask people to compare the lengths of objects that are floating in space. We are good at comparing the length of lines if those lines share a common baseline, but in a waterfall chart, very few of the bars do. Therefore, it’s hard to compare the specific sizes of growth or contraction between two subcategories.

• Some bars are meant to be read bottom-up and some top-down, depending on whether they are showing gains or losses, respectively. This is easier to mitigate if we group all of our gains and all of our losses together (ensuring that the chart maintains a regular arched or bowed shape); however, if we have subcategories sorted such that gains and losses are interspersed, the insights we might take away are harder to understand.

• One last challenge of the waterfall chart is a challenge for its designer, and it’s one that is true whenever we need to show large and small values together: the temptation to truncate your Y axis. It’s not uncommon for the “pillars” of waterfall charts to represent HUGE numbers (current valuation of our multinational conglomerate, for instance), while the component pieces representing a weekly or monthly change are comparatively small.

• In cases like this, it can be better off if you use a bar of zero length as your starting point, and just show the changes over time and then a final bar that shows the net change from the prior. You can then use text to write the actual number of the value of the starting amount.

Let us learn how to create a waterfall chart. For this chart, we are using the Sample Superstore Dataset.

Step 1: Open a new workbook in your Tableau Desktop and connect the sample superstore excel dataset to your new workbook.

Drag and drop Sub-Category to the columns field and Sales to the rows field.

Step 2: Sort the table into ascending order using the icon available in the toolbar.

Step 3: Click on row [sum(sales)] and add a quick table calculation for Running Total.

Step 4: Change the Chart type to Gantt Chart, negative sales are not part of the data. So we need to create a calculated field that shows negative sales.

Gantt charts display a mark at a start date and size the mark by duration, showing a visual connection between a starting point and an endpoint. The fact that Tableau has a mark type of “Gantt Bar” that can be sized by any value, whether it’s a duration or another type of value completely, unlocks some additional flexibility.

Gantt chart is used to convert a waterfall chart.

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Step 5: Create a calculated Field with the name Negative Sales and type [-Sales] and click OK.

Step 6: Now drag this newly created field [ Negative Sales ] and drop it into size.

Step 7:Now add your finishing touches to your chart. You can add the sales number to labels and colors to get a gradient look. And I usually format the chart by removing the grid lines and adding borders & Title to your chart.

Now we have our simple Waterfall Chart.

Conclusion :

In this blog, we have learned how to create a waterfall chart using a few easy steps.

We also learned in which scenarios we can use a waterfall chart for our visualization. I hope this blog was helpful and easy to understand.

Thanks for reading !!!