The value waterfall model summarizes how value can change each year based on 4 factors: 1) loss of value from discontinued products, 2) gain or loss of value from changes in volume of existing products, 3) gain or loss from changes in average price of existing products, and 4) gain of value from new products introduced. It tracks sales volume of each stock-keeping unit (SKU) by year in a matrix to analyze how volumes change over time for introduced, discontinued, and continuing SKUs.