💧 Day 31: Waterfall Chart in Python

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🔹 What is a Waterfall Chart?

A Waterfall Chart shows how an initial value is affected by a series of positive and negative changes, leading to a final value.

It’s also called a:

• Bridge Chart

• Cascade Chart

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🔹 When Should You Use It?

Use a waterfall chart when:

• Explaining profit & loss

• Showing revenue breakdown

• Analyzing budget changes

• Tracking step-by-step financial impact

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🔹 Example Scenario

Company Profit Calculation:

• Starting Revenue

• Marketing Costs

• Operational Costs

• Taxes

• Final Profit

A waterfall chart clearly shows how each component impacts the final number.

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🔹 Key Idea Behind It

👉 Start with an initial value
👉 Add/Subtract intermediate changes
👉 End with a final total
👉 Makes financial storytelling easy

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🔹 Python Code (Waterfall Chart using Plotly)

import plotly.graph_objects as go

 fig = go.Figure(go.Waterfall(

 name="Profit Breakdown", orientation="v", 

 measure=["absolute", "relative", "relative", "relative", "total"],
 x=["Revenue", "Marketing", "Operations", "Taxes", "Net Profit"], 

 y=[1000, -200, -150, -100, 0], 

)) 

 fig.update_layout(title="Company Profit Analysis") 

 fig.show()


📌 Install Plotly if needed:
pip install plotly

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🔹 Output Explanation

• Revenue starts at 1000

• Marketing reduces it

• Operations reduce it further

• Taxes reduce it again

• Final bar shows Net Profit

Each step visually builds on the previous one.

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🔹 Waterfall vs Stacked Bar Chart

Aspect	Waterfall Chart	Stacked Bar
Step impact clarity	Very High	Medium
Financial storytelling	Excellent	Average
Shows cumulative effect	✅	❌
Business reports	Ideal	Useful

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🔹 Key Takeaways

• Best for financial analysis

• Shows step-by-step impact

• Great for presentations

• Very powerful in dashboards