Profit Waterfall Chart Builder

A profit waterfall chart (also called a bridge chart) visually shows how revenue flows through cost layers to arrive at net income. Green bars represent income additions and red bars represent expense subtractions, with blue/gray bars marking key subtotals like gross profit and operating income. It makes your profit and loss statement immediately visual and intuitive.

Gross margin is revenue minus COGS (the cost to deliver your product). Operating margin subtracts operating expenses like payroll and marketing. Net margin is the final profit after taxes and all other income/expenses. For SaaS companies, healthy benchmarks are 70%+ gross margin, 10-20% operating margin, and 5-15% net margin. Compare yours with profit margin benchmarks by industry.

Read left to right. The first bar shows gross revenue. Each subsequent red bar shows an expense that reduces the running total. Blue/gray bars show subtotals (net revenue, gross profit, etc.). The final bar shows your net income. The size of each red bar relative to the starting green bar tells you which costs consume the most revenue. Use the profitability calculator for detailed margin analysis.

COGS includes direct costs to deliver your product. For SaaS: hosting, customer support, payment processing fees, and third-party API costs. For e-commerce: product cost, shipping, packaging, and fulfillment. For agencies: contractor costs and direct project expenses. Exclude indirect costs like marketing, R&D, and office space -- those go in operating expenses. Analyze your full cost structure with the gross margin calculator.

Net profit margins vary significantly by industry. SaaS companies at scale typically achieve 15-25% net margins. E-commerce businesses range from 5-15%. Agencies typically see 10-20%. Early-stage startups often have negative margins as they invest in growth. The waterfall chart helps you see exactly where margin is lost. See burn rate analysis if your margins are negative.