Accounting is the fundamental source of information necessary for the successful management of a company, and the bearers of accounting information are financial reports that reflect the operations of every business entity. Financial reports are very important source of information because they provide interested users with information about the performance and financial position of the company. They present all relevant and reliable accounting information, in a form and content that is recognizable and comprehensible to the persons for whom it is intended. For this reason, it is very important that users know how to read financial reports in a way that will give them answers to questions about how stable and successful a company is. Therefore, in this paper, the basic theoretical knowledge of financial reports and analysis of financial reports is covered. In the research part of the paper, an analysis of the profit and loss account and the balance sheet of the company Muraplast d.o.o. and selected competitors was performed. The analysis was made using structural and comparative financial reports, and using groups and systems of financial indicators. Analyzing the reports of Muraplast d.o.o. it can be concluded that the company operates successfully and stable and that there should be no problems in further operations.