The subject of this final thesis is the measurement of the financial performance of small and medium-sized enterprises in the hospitality industry. At the beginning of the work, financial statements were defined with special emphasis on the balance sheet and the profit and loss account. The balance sheet represents the company’s position on a specific day, while on the other hand, the profit and loss account is relevant to the presentation of the company’s operations over a certain period of time. Also, the financial indicators are clearly defined on the basis of which the liquidity, economy, financial stability and profitability of the company’s operations are evaluated. In the central part of the work, small and medium-sized enterprises, which generally play a major role in the economy, as well as their organizational form and legal regulations, are clearly defined. By applying horizontal and vertical analysis, on the examples of the company Asii pro d.o.o. and Slastičarnica Vincek d.o.o., the quality of the company’s operations was determined during the three observed periods. By using the balance sheet and profit and loss account, as well as financial indicators calculated on the basis of the aforementioned reports, the success of the business is determined, that is, the goal is to determine whether the company is operating in profit or loss.