The analysis of financial statements is an instrument of creating a financial basis based on the reviewing information from basic financial statements that management and administration uses in compiling the company's business strategy. The thesis is composed in five chapters. The first chapter deals with the introduction to the theme, content and structure of the thesis. The second chapter consists of basic financial statements, their structure and the national regulatory framework. The third chapter is devoted to instruments and tools for the analysis of financial statements and highlighting their importance of use, as well the advantages and limitations of using certain procedures. The fourth chapter, specifies the business of electricity distributors in Croatia and Italy and characteristics of the electricity market with emphasis on privatization. The last fifth chapter is intended for comparative analysis of the financial statements of the mentioned companies and the analysis of the opinions of the examinees obtained through survey. Comparative analysis of financial statements consists of horizontal and vertical analysis of balance sheet and profit and loss account, as well as analysis through individual indicators of liquidity, activity, indebtedness, profitability and economy. Companies HEP d.d. and ENEL S.p.A. are the main national producers and distributors of elecrticity in Croatia and Italy. ENEL S.p.A. is fully privatized company, while HEP d.d. is owned by the Republic of Croatia, i.e. the Goverment. By comparing the financial statements, similar dynamics of changing positions within the financial statments were observed due to the impact of the coronavirus on a global level, while in Croatia, the earthquake in Petrinja at the end of 2020 had an additional impact. The business of the companies and the result of the business year itself was felt in the period 2019.-2020., but the companies still ended year with positive result. In the following year 2021., the companies achieved recovery and improvement of operations, which was also seen in the financial statements of 2021. A survey was conducted on the attitudes of citizens and employees of HEP d.d. on the privatization of the company and it was resulted in a general consensus. The majority of citizens and all employees did not agree with the statment that the company HEP d.d. should be privatized and agreed that the privatization process would have a number of negative conseyuences for society.