FINANCIAL STATEMENTS AS A FOUNDATION FOR BUSINESS PERFORMANCE EVALUATION OF SMALL AND MEDIUM-SIZED ENTERPRISES

Small and medium-sized enterprises are a separate group of enterprises in terms of organization and structure of financial reporting primarily oriented on external users. However, the question remains to what extent small and medium-sized enterprises use such information in increasing quality of their business operations. This paper emphasizes the importance of financial statement analysis as a tool for assessing the financial position and success of business enterprises. Therefore financial statements of Croatian small and medium-sized enterprises were analyzed in order to assess the key indicators of safety and effectiveness of operations specific to them. 2010 has been less successful for the small and medium-sized, unlike large companies according to the results of research. However, it is important to note that the structure of assets of SMEs is more favorable than the average of the overall economy because results show that they managed to finance one portion of current assets by long-term high-quality sources. Finally, it could be confirmed that the economic crisis affected more the segment of small and medium-sized enterprises.