Visualizing Revenue Sources

Three charts can help convey the current state of revenues and product performance. They are particularly useful when a company has multiple product lines, and has grown to a scale that it is hard to appreciate how much each product line contributes to the big picture.

Note: the product names and associated values shown here are random and have no connection to any actual products or real financial details.

Revenue Area Chart

A revenue area chart, like the one below, straddles the space between traditional Excel-based tabular reports and more creative "infographics". Whereas raw numbers are hard to comprehend, humans have a reasonably good appreciation for the relative shape and areas of boxes, and the layout lends itself to adding more detail for further "drill down". This sort of chart is ideal for getting everyone on the same page for where the revenue comes from, and the relative contribution of different product lines.

Charts like this are relatively easy to produce in PowerPoint. Group related products together in the layout, and then directly control the size of boxes by editing the height and width. One tip is to group related boxes (revenues) together, and work out the overall dimensions of the group. From there, pick the height of the grouped box, and make that the height of the component boxes. From there, divide the revenues by the height, to figure out the width of each box.

Renewals and New Units Bar Chart

With software companies, it is common to have revenue both from new sales and maintenance renewals. Understanding the balance between these two sources gives insight into how the business is growing (or conversely is relying on the installed base). Typically the details are found in a tabular financial report, but they aren't always easiest to comprehend that way. A more immediately digestible form is the revenue and new units bar chart, as below.

The trick to making this graph in Excel is to make a simple table lists products down the rows, and new units and renewals in the columns. Make all the renewals numbers negative, and then create a stacked bar chart. Change the formatting of the data labels for the renewals, so they don't show as negatives on the chart.

Revenue Growth by Product Line (dollars and percentage)

Growth is high on the list of priorities for most companies. Two expressions of growth are (1) absolute dollar amount (increase in revenue from prior period) or (2) growth as a percentage. Both are important, although neither on its own tells the whole story. Best is to show both on the same chart, as below.

The trick to producing this graph is to plot dollars on the primary axis, and growth percentage on the secondary axis. In Excel, you can start with a simple column chart that shows both on one axis. Then select the growth data series, and in "properties" you'll find the option to plot it on the secondary axis.

Often the "zero" point on the primary and secondary axis won't line up. To fix this, adjust the upper and lower limits of the two axes until they do.