Financial reports are bussines documents which companies use to provide informations to people and organizations outside the company and to users inside the company. Basic financial reports are balance sheet, profit and loss statement, cash flow statement, statement of changes in equity and notes to financial statements. Analysis of financial statements is the proces of applying various analytical tools and tehniques by which the financial statements are converted into usable informations relevant for management. The task of analyzing financial statements is to recognize good features of the company, but also it's weaknesses. The financial analysis includes the analysis of the balance sheet and the profit and loss statement. Horizontal analysis allows comparing data over a longer period of time to detect tendencies and dynamics of changing individual pozitions of financial reports. Vertical analysis is used for compare financial reports data in one year. Indicator analysis is one of the most frequently used financial analysis. There are six groups of indicators, which are: indicators of liquidity, indebtendness, activity, economy, profitability and investment. Based on two comapnies Kraš d.d. and Koestlin d.d. were made horizontal and vertical analysis,balance sheet and profit and loss statement analysis in the period between 2016 to 2018 and analysis of four groups of indicators for 2018 for both companies.