What is a burn down chart?
A burn down chart is a visual representation of the work remaining during an iteration. It tracks the amount of work committed to for the sprint along the vertical axis and the time (usually the 3 or 4 weeks of the sprint) along the horizontal axis. This work can be the number of user stories outstanding, but I prefer to use the number of story points that still have to be completed.
Why should I use one?
You should use a burn down chart so that all project stakeholders (team, product owner, management) can see the progress (hopefully) that the team is making. The chart also allows you to easily see how well the iteration is progressing. If the graph is moving from the top-left to the bottom-right, then work is being completed and your iteration is accomplishing its goals. If the graph is staying even, or heaven forbid moving up, then you know your iteration is in danger of not being successful.
How do I create a burn down chart?
The easiest way to create a burn down chart is to leverage one of the many Excel templates that can be found online. These templates allow you to enter the amount of work remaining for the iteration every day of the sprint. Once you have updated the data points, the graph will automatically update.