Small and medium-sized entities are a separate group in the economy in terms of organization and the financial reporting structure. The foundations of the most developed world economies are small and medium enterprises, and in all economies of the world have a share of around 90 percent. The modern economy cannot be imagined without the small and medium enterprises. Their role is reflected in the number of enterprises, the number of employees and significant participation in the realization of the total national income. Small and medium-sized enterprises are the most common entrepreneurs who by establishing their own businesses or company realize their business ideas. Accounting is a basic source of information for current and potential customers in business decision-making procedures. The financial reporting has special importance in the process of preparation and publication of financial statements, generating information for external users. The financial statements of the management company provide users of financial statements needed information about the financial position and business performance of the company.Large, medium and small enterprises are obliged to prepare annual financial statements in the form, content and the manner prescribed by the Accounting Act. Annual financial statements are the statement of financial position, income statement, statement of comprehensive income, cash flow statement, statement of changes in equity and notes to the financial statements. The aim of this work is to define and analyze the financial statements of the company and on a concrete example demonstrate their application in practice. The analysis of financial reports of enterprises Serengeti doo, Zagreb has obtained the information on the safety and effectiveness of operations of the aforementioned company.