What are the benefits of using waterfall charts?

What are the benefits of using waterfall charts?

Waterfall charts help visualize the cumulative effect of sequentially introduced positive or negative values. They are great for showing how an initial value is affected by a series of intermediate values, leading to a final result.

Can you give me an example of where they are used?

Sure! Waterfall charts are commonly used in financial analysis to illustrate how revenue changes over time, showing the impact of various factors like sales growth, returns, and discounts.

What makes them better than other chart types?

Waterfall charts provide a clear visual representation of how individual components contribute to a total, making it easier to understand complex data compared to standard bar or line charts.

Are there any limitations to using waterfall charts?

Yes, waterfall charts can become cluttered with too many data points, and they may not be suitable for displaying data that doesn't have a clear sequential flow.