If you’re working in the financial department of a company or just dealing with financial data, you may be familiar with the Previous-Budget-Actual bar chart. It’s frequently used, occupying critical presentation and dashboard space, but sadly it lacks data density, contributing only three observations.
Managers rarely have time to thoroughly explore financial presentations, that is why you need to make as much information available as quickly as possible — an easily readable data-dense visualization serves this purpose well. In my pursuit to make denser bar charts, I found five techniques that I will share here:
Probably of the most often visualized datasets in the world are profit-loss statements of corporations month after month presented to executives in powerpoints. Millions of them are made and quickly thrown away faster than new Covid-19 case charts. It’s quite strange how few resources are there discussing visualizations of financial data.
Majority of those who do care about finance seem to favour waterfall charts (like this analyst) and for a good reason, because they provide insight a simple table does not have. Some utilize sankey or flow diagrams because they show flows of money in quite an intuitive way (cool example – a squared sankey in Tableau). Also, there are dashboards completely ignoring the specific structure of financial data – good (because it’s bad) example is this dashboard made by “somebody with good Tableau but limited finance knowledge” as said in one comment.
I consider myself as somebody with good financial knowledge so I tried finding a better way to visualize profit loss statement solving some limitations of waterfall and sankey charts:
waterfalls look much better when visualizing increases and decreases, but the distribution of revenues or expenses look weird done in this way.
sankeys simply cannot visualize negative results in an intuitive way
financial activity result is often presented as one line in profit-loss statements and might be positive or negative, so in a usual sankey diagram it would not have a fixed position independent of its value
And here is the result. Sankey is used for basic distribution of revenue or expenses and could be used for showing the further breakdown. The waterfall comes in after Operating profit is calculated and net results of financial and other activities are simply added and subtracted (in this specific case they’re tiny). Profit tax is again visualized as sankey, because usually, it has the same sign as profit. Also, mind the colours, black is used to show positive flows (revenue), blue (which is also provided in the brandbook of Amazon) is used for negative flows (expenses).
This approach allows for visualizing negative results as well. Where else could we look for companies with negative profits except the aviation industry! Here is the profit-loss statement of Lufthansa, a German air carrier. The visualization is a bit awkward at first, but once we get into the waterfall everything becomes simple and intuitive. Also, notice that profit tax is negative – it improves the result.
Of course this way to visualize profit-loss is far from perfect:
One issue is related to labels – when a rectangle is too small, the number does not fit inside. It is easy to solve, however – if labels are necessary they can be shown beside the names of categories.
Another issue is a comparison between time periods – this type of chart can show only one period. However some cross-company insights still could be made – just compare profit margins of Amazon with those of Aramco – the Saudi Arabian Oil Company:
I hope these charts will inspire further discussion about financial data visualization and more great ideas.
Imagine the situation – we want a beautiful and interactive chart on our website but have no knowledge of D3 or other fancy stuff, so, to pick a solution I am quickly trying them all and making a recommendation based on this experience.