The main goal of this final paper is to go through the analysis of the form, the method in compiling the annual financial reports and the content of the reports themselves, and at the end which annual financial reports should certain entrepreneurs compile for external users. Annual financial reports are: statement of financial position (balance sheet), statement of income (statement of profit or loss), statement of other comprehensive income, statement of changes in capital, statement of cash flows and notes. The balance sheet shows the state of assets and sources of assets on a certain day, usually at the beginning or at the end of the year. It consists of assets (assets) and liabilities (capital and liabilities) and is mandatory for all entrepreneurs regardless of their size. The profit and loss account (P&L) shows all incomes (business and financial) and expenses (business and financial) in a certain period of time (one year) and finally the profit before and after taxes. P&L report is also an obligation for all entrepreneurs. The report on other comprehensive income shows all the profits and losses that arose from economic conditions of the business and it is mandatory for compilation by IFRS users. The statement of cash flows is mandatory for medium and large enterprises. It shows the state of receipts and expenditures in a certain period of time and is compiled according to the direct and indirect method. The report on changes in capital shows changes in capital in a certain period of time. It is compiled only by medium and large entrepreneurs. There is also a mandatory report, namely the Notes to the financial reports. Notes accompany all financial reports and serve as their supplement, and all information that are not presented in the Balance Sheet and RDG for certain reasons are entered in them.