Ex Works (EXW)
Ex Works (EXW)

See Also:
Freight on Board (FOB)
Transfer Risk
How to manage inventory
Accounting Principles
Accounting Concepts

Ex Works (EXW) Definition

Ex works is an agreement between a buyer and a seller that the seller assumes no responsibility for the cost or liability for a product after it is produced and has left the seller’s warehouse.

Ex Works (EXW) Meaning

Ex works is the same as Freight on Board (FOB) Shipping. The two terms can be used interchangeably because they assume the same terms and agreement between the buyer and seller. The advantage of ex-works from a seller’s standpoint is that the seller is allowed to recognize revenue once the product has been picked up or a contract has been signed. If a contract has been signed then a seller could potentially recognize revenue as the product finishes going through the manufacturing process. On the other side ex works means that a buyer has a potential for loss for the transportation part of the purchase.

Ex Works (EXW) Example

Wawadoo Inc. is a company that specializes in the production of widgets. Wawadoo was recently able to sign ex works shipping terms with another company named, Wanna Widget Inc. Due to these terms, Wawadoo can save on the transportation cost associated with the charge focus solely on production. This becomes beneficial to both companies because Wanna Widget has a well established transportation network and is able to transport the products at a lower cost. Therefore, Wawadoo can drop the price of its widgets to Wanna Widget. Wanna Widget can lower its expense and sell widgets for lower because they can buy the product at a lower price and transport it for cheaper than Wawadoo could.
ex works


The Accounting Gap Between Large and Small Companies

The Accounting Gap: It’s unfortunate, but true. A large gap exists between the accounting departments of large or publicly traded companies and smaller or private companies. In our past 25 years of consulting we’ve noticed that more often than not, these smaller/private companies will fill the gap with Bookkeepers, rather than the degreed Accountants/CPAs they

Read More »

The Struggles of Private Company Accounting

Building your Accounting Department… When I meet a business owner operating at a successful $10+ mil in revenue I often hear them say “My CPA…” and I immediately know they are referring to a tax CPA. One thing ALL entrepreneurs have in common is that they have to file a tax return. So from day

Read More »

Financial Ratios

See also:Quick Ratio AnalysisPrice to Book Value AnalysisPrice Earnings Growth Ratio AnalysisTime Interest Earned Ratio Analysis Use of Financial Ratios Financial Ratios are used to measure financial performance against standards. Analysts compare financial ratios to industry averages (benchmarking), industry standards or rules of thumbs and against internal trends (trends analysis). The most useful comparison when

Read More »


Financial Leadership Workshop

MARCH 28TH-31ST 2022


Financial Leadership Workshop


June 12-15th, 2023

WIKI CFO® - Browse hundreds of articles