To ensure a successful development of an enterprise and to ensure its growth, one should understand its business operations and the path of achieving satisfactory business goals. In order to achieve those goals, it is an imperative to have a good quality of information, meaning that all enterprises are obliged to construct reliable, comparable and understandable financial reports according to standards and principles of accounting. Basic financial reports are a basis for business analysis of the enterprise. By analysing financial reports that are reliable, understandable, comparable and constructed according to standards and principles of accounting, the management department performs an analysis of business operations in which it is able to assess financial position and financial performance of the company. The financial analysis is an important tool used by a financial manager in order to make decisions related to enterprise’s performance. It precedes the process of administration, i.e. the process of planning, which is a part of the management. The basic methods of the analysis are horizontal and vertical analysis and the analysis of financial indicators. Vertical analysis of financial reports is based on structural financial reports, while horizontal analysis uses comparative financial reports. Analysis of financial indicators compares certain positions of financial reports in order to achieve more complete information about the business operations of the enterprise.