A waterfall chart is used to illustrate the cumulative effect of sequentially introduced positive and negative values on a starting quantity. One of the primary benefits of a waterfall chart is its ability to provide a clear and intuitive representation of how various factors contribute to a final outcome or total, highlighting the net impact of each component.
It enables analysts to easily identify the sources of change, such as revenue increases, cost reductions, or budget allocations, and understand their relative contributions to the overall result.
