Annual financial reports are a critical aspect of any business entity. Therefore, the analysis of financial statements is an important part of the business analysis process, with the aim of enabling a deeper understanding of the economic and financial situation of the company and identifying potential opportunities for future success and growth, as well as highlighting its weaknesses. To be meaningful, financial analysis must be conducted thoroughly and professionally. The purpose of this master's thesis is to apply financial indicators for the purpose of analyzing annual financial reports and to explore key information that will serve as the basis for decisions that will enable future growth and development of the company. It is crucial to conduct a precise financial analysis to generate reliable information that will serve as the foundation for making high-quality and timely business decisions. The master's thesis consists of a theoretical part that covers the basic concepts of annual financial reports and financial indicators of the company. The practical part of the work includes an analysis of the annual financial reports of the company Kožul Ltd. for the period from 2019 to 2021.