Waterfall charts in Excel - Cell-by-Cell Formula Trace

Sample Data

This data shows categories and their values for a waterfall chart. Column B has the changes, and column C will calculate the running total.

Cell	Value
A1	Category
B1	Value
A2	Start
B2	1000
A3	Sales
B3	300
A4	Returns
B4	-100
A5	Marketing
B5	-200
A6	Profit
B6
C1	Running Total
C2	1000
C3
C4
C5
C6

Formula Trace

=C2+B3

Step 1: C2

Step 2: B3

Step 3: C2 + B3

Cell Reference Map

    A       B       C
1 Category  Value  Running Total
2 Start     1000   1000  <-- Starting point
3 Sales     300    [=C2+B3]  <-- Running total adds Sales
4 Returns   -100   
5 Marketing -200   
6 Profit           

The formula in cell C3 uses values from C2 and B3 to calculate the running total after Sales.

Result

    A       B       C
1 Category  Value  Running Total
2 Start     1000   1000
3 Sales     300    1300
4 Returns   -100   
5 Marketing -200   
6 Profit           

Cell C3 shows 1300, which is the running total after adding Sales to the Start value.

Sheet Trace Quiz - 3 Questions

What does the formula =C2+B3 calculate in cell C3?

A The running total after adding Sales

B The difference between Start and Sales

C The value of Sales only

D The starting value only

Key Result

Running total formulas add the current value to the previous running total cell (e.g., =C2+B3).

Practice

1. What is the main purpose of a Waterfall chart in Excel?

easy

A. To show how an initial value changes step-by-step to a final value

B. To display data in a pie format

C. To compare values across categories side-by-side

D. To create a 3D visual effect for data

Solution

1. Step 1: Understand Waterfall chart purpose

   Waterfall charts visualize how an initial value changes through a series of positive and negative values to reach a final total.

2. Step 2: Compare with other chart types

   Pie charts show parts of a whole, bar charts compare categories, and 3D effects are visual styles, not purposes.

3. Final Answer:

   To show how an initial value changes step-by-step to a final value -> Option A

4. Quick Check:

   Waterfall charts = step-by-step changes [OK]

Hint: Waterfall = track increases and decreases stepwise [OK]

Common Mistakes:

• Confusing waterfall with pie or bar charts
• Thinking waterfall shows only totals, not changes
• Assuming waterfall charts use formulas directly

2. Which of these is the correct way to prepare data for a Waterfall chart in Excel?

easy

A. Use only positive values for all changes

B. Enter formulas directly into the chart

C. Use text labels only without numbers

D. Include both positive and negative values to show increases and decreases

Solution

1. Step 1: Identify data requirements for Waterfall charts

   Waterfall charts need positive values for increases and negative values for decreases to show step changes clearly.

2. Step 2: Eliminate incorrect options

   Using only positive values hides decreases, text labels alone don't create the chart, and formulas are not entered directly into charts.

3. Final Answer:

   Include both positive and negative values to show increases and decreases -> Option D

4. Quick Check:

   Positive and negative values = correct data setup [OK]

Hint: Use positive & negative numbers for changes [OK]

Common Mistakes:

• Using only positive numbers hides decreases
• Trying to put formulas inside the chart
• Using text without numbers for values

3. Given this data for a Waterfall chart:
Start: 100
Increase: 30
Decrease: -20
Increase: 10
What is the final total shown in the chart?

medium

A. 130

B. 120

C. 140

D. 150

Solution

1. Step 1: Add increases and decreases to start value

   Start with 100, add 30 (increase) = 130, subtract 20 (decrease) = 110, add 10 (increase) = 120.

2. Step 2: Calculate final total

   Final total after all changes is 120.

3. Final Answer:

   120 -> Option B

4. Quick Check:

   100 + 30 - 20 + 10 = 120 [OK]

Hint: Add positive and subtract negative values stepwise [OK]

Common Mistakes:

• Adding negative values instead of subtracting
• Ignoring decreases in calculation
• Mixing up order of operations

4. You created a Waterfall chart but it shows all bars starting from zero instead of connecting. What is the likely cause?

medium

A. Data does not include negative values

B. The data range is not formatted as a table

C. The 'Set as total' option is missing for subtotal rows

D. Chart type selected is not Waterfall

Solution

1. Step 1: Understand Waterfall chart bar connections

   Bars connect when Excel knows which rows are totals or subtotals, set by 'Set as total' option.

2. Step 2: Identify missing 'Set as total' setting

   If subtotal rows are not marked as totals, bars start from zero instead of continuing from previous values.

3. Final Answer:

   The 'Set as total' option is missing for subtotal rows -> Option C

4. Quick Check:

   Missing 'Set as total' = disconnected bars [OK]

Hint: Mark subtotal rows as totals to connect bars [OK]

Common Mistakes:

• Assuming negative values fix bar connections
• Thinking table format affects bar start points
• Choosing wrong chart type without checking data

5. You want to create a Waterfall chart showing monthly sales changes, but some months have zero change. How should you handle zero values to keep the chart clear?

hard

A. Leave zero values as is; Excel will show no bar for those months

B. Remove rows with zero values from the data

C. Replace zero values with small positive numbers

D. Convert zero values to negative numbers

Solution

1. Step 1: Understand zero values in Waterfall charts

   Zero values represent no change, so Excel shows no bar for those points, keeping the chart accurate and clear.

2. Step 2: Avoid altering zero values

   Replacing zeros with small positives or negatives misrepresents data; removing rows loses timeline context.

3. Final Answer:

   Leave zero values as is; Excel will show no bar for those months -> Option A

4. Quick Check:

   Zero values = no bar, keep data accurate [OK]

Hint: Keep zeros; chart shows no bar for no change [OK]

Common Mistakes:

• Changing zeros to small numbers distorts data
• Deleting zero rows breaks timeline
• Using negative numbers for zero changes