How to create a Bridge Chart in Excel

Bridge charts are an effective way to visually represent the changes in data over time. They are commonly used in finance to show the difference between two periods, such as year-over-year or quarter-over-quarter. In this article, we will explore the importance of bridge charts and how to create them in Microsoft Excel.

Introduction to Bridge Charts and their Importance

Bridge charts, also known as waterfall charts, are a graphical representation of data that shows how different factors contribute to a change over time. They are useful in identifying the cause and effect relationship between two periods. A bridge chart can be used to show the overall positive or negative change in data and also break it down to identify specific factors that contributed to the change.

Bridge charts are particularly important for businesses to track changes in sales, revenue, expenses, and profits. By understanding the factors that contributed to the changes in these metrics, businesses can better allocate resources and make strategic decisions for the future.

Moreover, bridge charts can also be used in non-business settings, such as in healthcare to track changes in patient outcomes or in education to track changes in student performance. They provide a clear and concise visual representation of data that can be easily understood by stakeholders and decision-makers.

Understanding the Data Requirements for Creating a Bridge Chart

The data required for creating a bridge chart includes the starting and ending values for the period being analyzed and the factors that contributed to the change. It is important to ensure that the data is accurate and complete to get an accurate representation of the change over time.

For example, if you are analyzing changes in monthly revenue, you will need to have the starting and ending revenue figures for each month. You will also need to identify the specific factors that contributed to the change, such as new customers, lost customers, price changes, or promotions.

Another important aspect to consider when gathering data for a bridge chart is the time frame being analyzed. It is important to choose a time frame that is relevant to the analysis being conducted. For instance, if you are analyzing changes in revenue over the course of a year, it may be more useful to break down the data into quarterly or monthly intervals to get a more detailed understanding of the changes.

In addition to accurate and complete data, it is also important to present the data in a clear and concise manner. This can be achieved by using visual aids such as graphs and charts to help illustrate the changes over time. It is also important to provide context for the data by including relevant information such as market trends or industry benchmarks.

Steps to Create a Bridge Chart in Excel

Creating a bridge chart in Excel is a straightforward process. The following steps will guide you through a complete process:

1. Open a new Excel workbook, and enter the data for the starting and ending values, and the factors that contributed to the change
2. Insert a column chart and delete the vertical axis and the legend. Use the layout and formatting options to adjust the chart to your desired size
3. Select the chart data and go to the chart tools menu. Choose the ‘Switch Row/Column’ option, which will change the orientation of the chart
4. Select the first data series, right-click on it, and choose ‘Change Series Chart Type.’ Choose the ‘Line Chart’ type and select ‘OK’
5. Format the line chart to your desired color, thickness, and style. You can also add data labels to the line chart for better visualization
6. Select the second data series, right-click on it, and choose ‘Add Data Labels.’ Format the labels to only show the Ending Values.
7. Select the third data series, right-click on it, and choose ‘Add Data Labels.’ Format the labels to only show the Difference Values and move them to the center of the column bars
8. Format the chart to your desired look and feel, including axis labels, titles, gridlines, and fonts
9. Your completed bridge chart is now ready to be analyzed and presented

Bridge charts are commonly used in finance and accounting to show the changes in financial data over time. They are also useful in project management to show the changes in project costs or timelines.

When creating a bridge chart, it is important to choose the right type of chart to represent your data accurately. Column charts are the most commonly used type of chart for bridge charts, but you can also use stacked bar charts or waterfall charts depending on your data.

Using Pivot Tables to Prepare Data for a Bridge Chart

A Pivot table is an essential tool for creating bridge charts in Excel. It is used to summarize and analyze large datasets quickly. By using a Pivot table, you can identify the factors that contributed to the change and ensure that the data is accurate and complete. Follow these steps to prepare your data using a Pivot table:

1. Select the dataset you want to analyze and go to the ‘Insert’ menu and choose ‘PivotTable.’
2. Select the fields you want to include in your analysis and drag them into the ‘Row labels’ and ‘Values’ areas in the PivotTable Field List
3. Use the ‘Value Field Settings’ option to summarize the data by ‘Difference’ between the starting and ending values
4. Use the filtering options to narrow your analysis down to a specific time period or data category
5. Once your Pivot table is set up, you can use the Pivot Chart option to create a bridge chart

One of the benefits of using a Pivot table is that it allows you to easily spot trends and patterns in your data. You can quickly identify which factors had the most significant impact on the change you are analyzing. Additionally, Pivot tables can help you identify any outliers or anomalies in your data that may need further investigation.

Another advantage of using Pivot tables is that they are highly customizable. You can change the layout of your Pivot table to suit your needs, and you can add or remove fields as necessary. This flexibility allows you to create a Pivot table that is tailored to your specific analysis requirements.

Customizing the Appearance of Your Bridge Chart

Customizing the appearance of your bridge chart is an important step in ensuring that it is effective and visually appealing. Here are some tips for customizing the appearance of your bridge chart:

1. Choose colors that are visually appealing and align with the branding of your business
2. Use fonts that are easy to read and distinguishable from each other
3. Add labels and titles that clearly explain the purpose of the chart and the data being analyzed
4. Use data labels to highlight specific data points or categories
5. Include gridlines to better visualize the differences between data points

Another important aspect of customizing the appearance of your bridge chart is to ensure that it is easily understandable for your target audience. This can be achieved by using simple language and avoiding technical jargon that may be unfamiliar to them.

Additionally, it is important to consider the size and placement of your chart. If it is too small or placed in an inconspicuous location, it may not be noticed by your audience. On the other hand, if it is too large or placed in a distracting location, it may overwhelm your audience and detract from the message you are trying to convey.

Analyzing and Interpreting Results from a Bridge Chart

Once you have created your bridge chart, it is important to analyze and interpret the results. Here are some tips for analyzing and interpreting results from a bridge chart:

1. Use the chart to identify the overall change in data and the specific factors that contributed to the change
2. Compare the differences between the starting and ending values to understand the magnitude of the change
3. Review the data labels to understand the individual contribution of each factor to the overall change
4. Use the chart to identify trends and patterns over time to inform strategic decision-making
5. Share the results of your analysis with key stakeholders for feedback and discussion

Tips and Tricks for Creating Effective Bridge Charts in Excel

Here are some tips and tricks for creating effective bridge charts in Excel:

1. Ensure that your data is accurate and complete before creating the chart
2. Use a Pivot table to analyze large datasets quickly
3. Use data labels to highlight specific data points and increase visibility
4. Choose colors, fonts, and styles that are visually appealing and align with your branding
5. Add labels and titles that clearly explain the purpose of the chart and the data being analyzed

Common Mistakes to Avoid When Creating a Bridge Chart

Here are some common mistakes to avoid when creating a bridge chart in Excel:

1. Not using accurate and complete data results in an inaccurate representation of the change over time
2. Using too many colors or fonts can make the chart look cluttered and confusing
3. Using incorrect chart type can make it more difficult for viewers to understand the purpose of the chart
4. Not analyzing or interpreting the results can make the chart irrelevant and not useful
5. Leaving out important data points or categories can skew the overall results of the chart

Best Practices for Presenting Your Bridge Chart to an Audience

When presenting your bridge chart to an audience, it is important to follow these best practices:

1. Prepare for your presentation by reviewing the data and understanding the trends and patterns
2. Use data labels to highlight specific data points and increase visibility
3. Explain the purpose of the chart and the data being analyzed
4. Include labels and titles that clearly identify the different categories and values being analyzed
5. Use simple language and avoid technical jargon

Comparing Different Types of Charts to Choose the Best Visualization Method

It is important to understand the different types of charts available to choose the best visualization method for your data.

Other types of charts that can be used to visualize changes over time include line charts, stacked column charts, and bar charts. By understanding the different purposes and applications of each type of chart, you can choose the best approach that accurately represents the data and focuses attention on the most important factors.

In conclusion, bridge charts are a powerful tool that can help businesses and individuals quantify and visualize changes over time. By following these steps, you can confidently create effective bridge charts in Excel and use them to make informed decisions for the future.