Concept · article 05 of 14

Understanding the
EBIT waterfall.

How gross becomes EBIT, one subtraction at a time, in a single chart. The story your P&L wishes it told.

Ibrahim Ölmez Ibrahim ÖlmezFounder · nouz · 6 min read · Updated this week
Visual subtraction. The waterfall is the EBIT formula as a chart. Tall bar on the left (gross revenue), shrinking through each subtraction, ending in EBIT on the right.

The waterfall is the most useful visualisation in nouz for understanding the shape of your business. The same EBIT number can come from different waterfalls — and the shape tells you what kind of shop you are and where the levers are.

01 What it shows

A stacked column chart, left to right:

  • Gross revenue — the tall starting bar.
  • − Tax — first subtraction, in a dim colour.
  • − Transaction fees — second subtraction.
  • − COGS — biggest subtraction for most shops.
  • − Variable costs — Expenses tab total.
  • − Fixed cost slice — your daily allocation × number of days in range.
  • = EBIT — what's left.

02 How to read it

Look at the relative heights. If the COGS chunk is enormous, your margin per unit is thin and worth a closer look. If fixed cost is dominant, you're running close to break-even and any revenue dip stings. If tax + fees are large, you're card-heavy in a high-VAT country (normal for Austria / Germany).

03 What it tells you

The waterfall makes the structure of your business visible. Three patterns to watch for:

  • COGS-dominated — margin business. Improve by raising prices or reducing COGS per unit.
  • Fixed-cost-dominated — capacity business. Improve by adding volume or reducing overhead.
  • Balanced — healthy. Improve marginally in multiple areas.

04 Spotting changes month-over-month

When you switch the range picker between this month and last month, the waterfall reshapes. The most useful thing to spot: a subtraction line that grew faster than gross revenue. If gross is up 10% but COGS is up 20%, your margin is silently shrinking and the waterfall flags it visually before any "margin drift" insight tag fires.

Waterfall ≠ time series. The waterfall shows the total for the range as a single composition. For trends over time, the main chart (daily EBIT) and the sparklines are the better view.

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