A Sankey diagram is a type of visualization that shows the flow of something, such as energy, water, or money.
It is a special type of flow diagram and consists of a series of interconnected lines that represent the flows. The width of each line represents the amount of flow. The lines are typically color-coded or labeled to show where the flow is coming from and where it is going to.
Sankey diagrams can help to make an income statement more easily understandable and actionable.
Sankey diagrams can show where revenue is coming from, how it is being converted into different types of expenses, and how it ultimately results in net income or loss.
This can help to identify areas where cost savings may be possible, or where revenue is being lost.
Additionally, Sankey diagrams can be useful for comparing the performance of different income statements over time. They can also be useful for identifying patterns or trends in the data, which can be helpful for forecasting future performance. Overall, Sankey diagrams can help to make an income statement more easily understandable and actionable.
You can copy your entire dataset by selecting all relevant cells in Excel and copy pasting them into the SankeyArt input spread sheet.
We also provide an Excel template in the ressources table on the bottom of this page.
CFOs, COOs, finance departments, investor relations departments, consultants, accounting firms and investors.
People use Sankey diagrams in reports and presentations to visually communicate financial data.
They are useful for providing a high-level overview of the data, and can help to identify patterns and trends that might not be obvious from a traditional tabular format. Compared to other chart types, Sankey diagrams are information rich: They visualize the amount of the various financial positions, their structure and with labels how financial positions change over time.
The greater value.
SankeyArt calculates the sum of all input flows to a node and the sum of all output flows for the current year. If these two sums are not the same because there is an imbalance between inflows and outflows, SankeyArt uses the greater of the two values for the year-over-year calculation. The same procedure is used for calculating the node values for the last year.
Note that not specifying some flow value for the current year but specifying it for the last year can lead to undesired behavior. Make sure that each node receives all its flows in both years as otherwise year-over-year changes cannot be calculated consistently.
You can either display the loss as a position that flows into a node (instead of flowing out of it) or you can display it as a flow that is not connected to the main Sankey diagram.
For the first possibility, displaying the loss as a position that flows into a node, let's look at Shopify's income statement for the fiscal year 2022. Shopify had an operating loss. To generate the Sankey shown below, we defined a flow where the "operating loss" node flowed into "operating expenses" node.
For the second possibility, consider the hypothetical "Orange Inc" which competes with Apple. Unfortunately, its high operating expenses exceed its gross profit.
We can display the operating loss by avoiding to display a flow from the "gross profit" node to the "operating loss" node. Instead, we show operationg loss as an independent flow and drag the "operating loss" node close to "gross profit" node.
Finally, we need to use a custom label for gross profit as otherwise the value of the operating expenses is shown. This is necessary because the outflows are higher than the inflows and SankeyArt displays the higher value if a node has an inbalance.
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