The topic of this thesis is a financial statement analysis with the goal of identifying recovery signes of the construction activity in the Republic of Croatia. The environment in the construction industry is extremely dynamic and is linked to other activities in the country. With the onset of the economic crisis in 2008, the construction sector plunged into crisis. For this reason, the aim of this paper is to analyze the state of overall economic activity and the financial statements of four construction companies and to determine if there are signs of recovery from the crisis. In addition to theoretical definition of the term and characteristics of the basic financial statements and instruments and techniques of analyzing the financial statements, the basic characteristics of the construction industry and the specifics of financial reporting in the construction industry will be described. In order to properly carry out the analysis, the accounting, tax and legislative framework of financial reporting in the construction industry is described. In order to compare the trends in the financial statements with the trends in the construction industry in the Republic of Croatia, the key indicators of economic trends and the positive and negative factors affecting are analyzed. The financial statements of GP Krk d.d., Kamgrad d.o.o., Strabag d.o.o. and Zagreb-Montaža d.o.o. are analyzed from 2010 to 2018. Horizontal, vertical and indicator-based analysis identified signs of a recovery in the construction sector based on the financial statements of the company. It was also found that their recovery was rather slow and subject to fluctuations, but showed a significant improvement towards the end of the observed period. The recovery trend was influenced by negative factors such as the excessive size of the construction sector in the pre-crisis periods, the fiscal constraint of the state and the lack of manpower, and the unprepared EU fundraising following the entry into the EU. It was also found that in addition to the underlying economic developments and the impact of laws and accounting regulations on the operations of firms, their mutual competition in the market causes fluctuations in their recovery movements.