diff --git a/.github/.testcoverage-local.yml b/.github/.testcoverage-local.yml
index c33ba25c..8ce01510 100644
--- a/.github/.testcoverage-local.yml
+++ b/.github/.testcoverage-local.yml
@@ -1,7 +1,6 @@
 # Config file for go-test-coverage running locally.
 
 profile: cover.profile
-local-prefix: github.com/vladopajic/go-test-coverage/v2
 threshold:
   file: 100
   total: 98
diff --git a/.github/workflows/action-test.yml b/.github/workflows/action-test.yml
index d97358f9..e1055379 100644
--- a/.github/workflows/action-test.yml
+++ b/.github/workflows/action-test.yml
@@ -95,7 +95,6 @@ jobs:
         id: test-3
         with:
           profile: cover.out
-          local-prefix: "github.com/vladopajic/go-test-coverage/v2"
           threshold-file: 0
           threshold-package: 0
           threshold-total: 0
@@ -108,7 +107,6 @@ jobs:
         continue-on-error: true
         with:
           profile: cover.out
-          local-prefix: "github.com/vladopajic/go-test-coverage/v2"
           threshold-file: 0
           threshold-package: 0
           threshold-total: 100
diff --git a/.github/workflows/testdata/total100.yml b/.github/workflows/testdata/total100.yml
index 96fd8d5b..4e7d3dee 100644
--- a/.github/workflows/testdata/total100.yml
+++ b/.github/workflows/testdata/total100.yml
@@ -1,7 +1,6 @@
 # This file is used for integration tests
 
 profile: cover.out
-local-prefix: "github.com/vladopajic/go-test-coverage/v2"
 threshold:
   file: 0
   package: 0
diff --git a/.github/workflows/testdata/zero.yml b/.github/workflows/testdata/zero.yml
index d509f878..479891ba 100644
--- a/.github/workflows/testdata/zero.yml
+++ b/.github/workflows/testdata/zero.yml
@@ -1,7 +1,6 @@
 # This file is used for integration tests
 
 profile: cover.out
-local-prefix: "github.com/vladopajic/go-test-coverage/v2"
 threshold:
   file: 0
   package: 0
diff --git a/.testcoverage.example.yml b/.testcoverage.example.yml
index f807bea8..da9937d3 100644
--- a/.testcoverage.example.yml
+++ b/.testcoverage.example.yml
@@ -7,10 +7,6 @@
 # of profile files, e.g., 'cover_unit.out,cover_integration.out'.
 profile: cover.out
 
-# (optional; but recommended to set) 
-# When specified reported file paths will not contain local prefix in the output.
-local-prefix: "github.com/org/project"
-
 # Holds coverage thresholds percentages, values should be in range [0-100].
 threshold:
   # (optional; default 0) 
diff --git a/README.md b/README.md
index b6caacc1..be334b8a 100644
--- a/README.md
+++ b/README.md
@@ -90,10 +90,6 @@ Here’s an example [.testcoverage.yml](./.testcoverage.example.yml) configurati
 # of profile files, e.g., 'cover_unit.out,cover_integration.out'.
 profile: cover.out
 
-# (optional; but recommended to set) 
-# When specified reported file paths will not contain local prefix in the output.
-local-prefix: "github.com/org/project"
-
 # Holds coverage thresholds percentages, values should be in range [0-100].
 threshold:
   # (optional; default 0) 
diff --git a/action.yml b/action.yml
index 4ff3ab70..4dea6bf2 100644
--- a/action.yml
+++ b/action.yml
@@ -15,8 +15,9 @@ inputs:
     required: false
     default: ""
     type: string
-  local-prefix:
-    description: When specified reported file paths will not contain local prefix in the output. Overrides value from configuration.
+  # DEPRECATED
+  local-prefix: 
+    description: DEPRECATED! not used anymore.
     required: false
     default: ""
     type: string
@@ -132,7 +133,6 @@ runs:
     - --config=${{ inputs.config || '''''' }}
     - --profile=${{ inputs.profile || '''''' }}
     - --github-action-output=true
-    - --local-prefix=${{ inputs.local-prefix || '''''' }}
     - --threshold-file=${{ inputs.threshold-file }}
     - --threshold-package=${{ inputs.threshold-package }}
     - --threshold-total=${{ inputs.threshold-total }}
diff --git a/docs/badge.md b/docs/badge.md
index becf0a9b..eddf2998 100644
--- a/docs/badge.md
+++ b/docs/badge.md
@@ -21,7 +21,6 @@ Example:
   uses: vladopajic/go-test-coverage@v2
   with:
     profile: cover.out
-    local-prefix: github.com/org/project
     threshold-total: 95
 
     ## when token is not specified (value '') this feature is turned off
@@ -67,7 +66,6 @@ Example:
   uses: vladopajic/go-test-coverage@v2
   with:
     profile: cover.out
-    local-prefix: github.com/org/project
     threshold-total: 95
 
     ## when secret is not specified (value '') this feature is turned off.
@@ -94,7 +92,6 @@ Example:
   uses: vladopajic/go-test-coverage@v2
   with:
     profile: cover.out
-    local-prefix: github.com/org/project
     threshold-total: 95
 
     # badge will be generated and store on file system with `coverage.svg` name
@@ -113,7 +110,6 @@ Example:
   uses: vladopajic/go-test-coverage@v2
   with:
     profile: cover.out
-    local-prefix: github.com/org/project
     threshold-total: 95
 
     ## in this case token should be from other repository that will host badges.
diff --git a/docs/github_action.md b/docs/github_action.md
index cd55da0f..93ef95d6 100644
--- a/docs/github_action.md
+++ b/docs/github_action.md
@@ -31,7 +31,6 @@ Alternatively, if you don't need advanced configuration options from a config fi
     uses: vladopajic/go-test-coverage@v2
     with:
       profile: cover.out
-      local-prefix: github.com/org/project
       threshold-file: 80
       threshold-package: 80
       threshold-total: 95
diff --git a/main.go b/main.go
index b88a5235..50ddb39a 100644
--- a/main.go
+++ b/main.go
@@ -26,7 +26,7 @@ const (
 type args struct {
 	ConfigPath         string `arg:"-c,--config"`
 	Profile            string `arg:"-p,--profile"              help:"path to coverage profile"`
-	LocalPrefix        string `arg:"-l,--local-prefix"`
+	LocalPrefix        string `arg:"-l,--local-prefix"` // deprecated
 	GithubActionOutput bool   `arg:"-o,--github-action-output"`
 	ThresholdFile      int    `arg:"-f,--threshold-file"`
 	ThresholdPackage   int    `arg:"-k,--threshold-package"`
@@ -99,7 +99,7 @@ func (a *args) overrideConfig(cfg testcoverage.Config) (testcoverage.Config, err
 	}
 
 	if !isCIDefaultString(a.LocalPrefix) {
-		cfg.LocalPrefix = a.LocalPrefix
+		cfg.LocalPrefixDeprecated = a.LocalPrefix
 	}
 
 	if !isCIDefaultInt(a.ThresholdFile) {
diff --git a/pkg/testcoverage/check.go b/pkg/testcoverage/check.go
index d3474a02..a272734d 100644
--- a/pkg/testcoverage/check.go
+++ b/pkg/testcoverage/check.go
@@ -42,6 +42,11 @@ func Check(w io.Writer, cfg Config) bool {
 			fmt.Fprintf(w, "failed setting github action output: %v\n", err)
 			return false
 		}
+
+		if cfg.LocalPrefixDeprecated != "" { // coverage-ignore
+			reportGHWarning(w, "Deprecated option",
+				"local-prefix option is deprecated since v2.13.0, you can safely remove setting this option")
+		}
 	}
 
 	err = generateAndSaveBadge(w, cfg, result.TotalStats.CoveredPercentage())
@@ -68,8 +73,8 @@ func reportForHuman(w io.Writer, result AnalyzeResult) string {
 func GenerateCoverageStats(cfg Config) ([]coverage.Stats, error) {
 	return coverage.GenerateCoverageStats(coverage.Config{ //nolint:wrapcheck // err wrapped above
 		Profiles:     strings.Split(cfg.Profile, ","),
-		LocalPrefix:  cfg.LocalPrefix,
 		ExcludePaths: cfg.Exclude.Paths,
+		RootDir:      cfg.RootDir,
 	})
 }
 
diff --git a/pkg/testcoverage/check_test.go b/pkg/testcoverage/check_test.go
index c331a4c2..1773c726 100644
--- a/pkg/testcoverage/check_test.go
+++ b/pkg/testcoverage/check_test.go
@@ -21,6 +21,9 @@ const (
 	profileNOK   = testdataDir + testdata.ProfileNOK
 	breakdownOK  = testdataDir + testdata.BreakdownOK
 	breakdownNOK = testdataDir + testdata.BreakdownNOK
+
+	prefix  = "github.com/vladopajic/go-test-coverage/v2"
+	rootDir = "../../"
 )
 
 func TestCheck(t *testing.T) {
@@ -30,8 +33,6 @@ func TestCheck(t *testing.T) {
 		return
 	}
 
-	const prefix = "github.com/vladopajic/go-test-coverage/v2"
-
 	t.Run("no profile", func(t *testing.T) {
 		t.Parallel()
 
@@ -59,11 +60,12 @@ func TestCheck(t *testing.T) {
 		t.Parallel()
 
 		buf := &bytes.Buffer{}
-		cfg := Config{Profile: profileOK, Threshold: Threshold{Total: 65}}
+		cfg := Config{Profile: profileOK, Threshold: Threshold{Total: 65}, RootDir: rootDir}
 		pass := Check(buf, cfg)
 		assert.True(t, pass)
 		assertGithubActionErrorsCount(t, buf.String(), 0)
 		assertHumanReport(t, buf.String(), 1, 0)
+		assertNoFileNames(t, buf.String(), prefix)
 		assertNoUncoveredLinesInfo(t, buf.String())
 	})
 
@@ -77,6 +79,7 @@ func TestCheck(t *testing.T) {
 			Exclude: Exclude{
 				Paths: []string{`cdn\.go$`, `github\.go$`, `cover\.go$`, `check\.go$`, `path\.go$`},
 			},
+			RootDir: rootDir,
 		}
 		pass := Check(buf, cfg)
 		assert.True(t, pass)
@@ -89,7 +92,7 @@ func TestCheck(t *testing.T) {
 		t.Parallel()
 
 		buf := &bytes.Buffer{}
-		cfg := Config{Profile: profileOK, Threshold: Threshold{Total: 100}}
+		cfg := Config{Profile: profileOK, Threshold: Threshold{Total: 100}, RootDir: rootDir}
 		pass := Check(buf, cfg)
 		assert.False(t, pass)
 		assertGithubActionErrorsCount(t, buf.String(), 0)
@@ -102,20 +105,6 @@ func TestCheck(t *testing.T) {
 		})
 	})
 
-	t.Run("valid profile - pass with prefix", func(t *testing.T) {
-		t.Parallel()
-
-		buf := &bytes.Buffer{}
-
-		cfg := Config{Profile: profileOK, LocalPrefix: prefix, Threshold: Threshold{Total: 65}}
-		pass := Check(buf, cfg)
-		assert.True(t, pass)
-		assertGithubActionErrorsCount(t, buf.String(), 0)
-		assertHumanReport(t, buf.String(), 1, 0)
-		assertNoFileNames(t, buf.String(), prefix)
-		assertNoUncoveredLinesInfo(t, buf.String())
-	})
-
 	t.Run("valid profile - pass after override", func(t *testing.T) {
 		t.Parallel()
 
@@ -124,6 +113,7 @@ func TestCheck(t *testing.T) {
 			Profile:   profileOK,
 			Threshold: Threshold{File: 100},
 			Override:  []Override{{Threshold: 10, Path: "^pkg"}},
+			RootDir:   rootDir,
 		}
 		pass := Check(buf, cfg)
 		assert.True(t, pass)
@@ -141,6 +131,7 @@ func TestCheck(t *testing.T) {
 			Profile:   profileOK,
 			Threshold: Threshold{File: 10},
 			Override:  []Override{{Threshold: 100, Path: "^pkg"}},
+			RootDir:   rootDir,
 		}
 		pass := Check(buf, cfg)
 		assert.False(t, pass)
@@ -162,6 +153,7 @@ func TestCheck(t *testing.T) {
 			Profile:   profileOK,
 			Threshold: Threshold{File: 70},
 			Override:  []Override{{Threshold: 60, Path: "pkg/testcoverage/badgestorer/github.go"}},
+			RootDir:   rootDir,
 		}
 		pass := Check(buf, cfg)
 		assert.True(t, pass)
@@ -179,6 +171,7 @@ func TestCheck(t *testing.T) {
 			Profile:   profileOK,
 			Threshold: Threshold{File: 70},
 			Override:  []Override{{Threshold: 80, Path: "pkg/testcoverage/badgestorer/github.go"}},
+			RootDir:   rootDir,
 		}
 		pass := Check(buf, cfg)
 		assert.False(t, pass)
@@ -202,6 +195,7 @@ func TestCheck(t *testing.T) {
 			Badge: Badge{
 				FileName: t.TempDir(), // should failed because this is dir
 			},
+			RootDir: rootDir,
 		}
 		pass := Check(buf, cfg)
 		assert.False(t, pass)
@@ -215,6 +209,7 @@ func TestCheck(t *testing.T) {
 		cfg := Config{
 			Profile:           profileOK,
 			BreakdownFileName: t.TempDir(), // should failed because this is dir
+			RootDir:           rootDir,
 		}
 		pass := Check(buf, cfg)
 		assert.False(t, pass)
@@ -228,6 +223,7 @@ func TestCheck(t *testing.T) {
 		cfg := Config{
 			Profile:           profileOK,
 			BreakdownFileName: t.TempDir() + "/breakdown.testcoverage",
+			RootDir:           rootDir,
 		}
 		pass := Check(buf, cfg)
 		assert.True(t, pass)
@@ -250,6 +246,7 @@ func TestCheck(t *testing.T) {
 			Diff: Diff{
 				BaseBreakdownFileName: t.TempDir(), // should failed because this is dir
 			},
+			RootDir: rootDir,
 		}
 		pass := Check(buf, cfg)
 		assert.False(t, pass)
@@ -267,7 +264,12 @@ func TestCheckNoParallel(t *testing.T) {
 		t.Setenv(GaOutputFileEnv, "")
 
 		buf := &bytes.Buffer{}
-		cfg := Config{Profile: profileOK, GithubActionOutput: true, Threshold: Threshold{Total: 100}}
+		cfg := Config{
+			Profile:            profileOK,
+			GithubActionOutput: true,
+			Threshold:          Threshold{Total: 100},
+			RootDir:            rootDir,
+		}
 		pass := Check(buf, cfg)
 		assert.False(t, pass)
 	})
@@ -277,7 +279,12 @@ func TestCheckNoParallel(t *testing.T) {
 		t.Setenv(GaOutputFileEnv, testFile)
 
 		buf := &bytes.Buffer{}
-		cfg := Config{Profile: profileOK, GithubActionOutput: true, Threshold: Threshold{Total: 10}}
+		cfg := Config{
+			Profile:            profileOK,
+			GithubActionOutput: true,
+			Threshold:          Threshold{Total: 10},
+			RootDir:            rootDir,
+		}
 		pass := Check(buf, cfg)
 		assert.True(t, pass)
 		assertGithubActionErrorsCount(t, buf.String(), 0)
@@ -291,7 +298,12 @@ func TestCheckNoParallel(t *testing.T) {
 		t.Setenv(GaOutputFileEnv, testFile)
 
 		buf := &bytes.Buffer{}
-		cfg := Config{Profile: profileOK, GithubActionOutput: true, Threshold: Threshold{Total: 100}}
+		cfg := Config{
+			Profile:            profileOK,
+			GithubActionOutput: true,
+			Threshold:          Threshold{Total: 100},
+			RootDir:            rootDir,
+		}
 		pass := Check(buf, cfg)
 		assert.False(t, pass)
 		assertGithubActionErrorsCount(t, buf.String(), 1)
@@ -319,7 +331,7 @@ func Test_Analyze(t *testing.T) {
 		t.Parallel()
 
 		result := Analyze(
-			Config{LocalPrefix: prefix, Threshold: Threshold{Total: 10}},
+			Config{Threshold: Threshold{Total: 10}},
 			randStats(prefix, 10, 100),
 			nil,
 		)
@@ -350,7 +362,7 @@ func Test_Analyze(t *testing.T) {
 		t.Parallel()
 
 		result := Analyze(
-			Config{LocalPrefix: prefix, Threshold: Threshold{File: 10}},
+			Config{Threshold: Threshold{File: 10}},
 			randStats(prefix, 10, 100),
 			nil,
 		)
@@ -379,7 +391,7 @@ func Test_Analyze(t *testing.T) {
 		t.Parallel()
 
 		result := Analyze(
-			Config{LocalPrefix: prefix, Threshold: Threshold{Package: 10}},
+			Config{Threshold: Threshold{Package: 10}},
 			randStats(prefix, 10, 100),
 			nil,
 		)
diff --git a/pkg/testcoverage/config.go b/pkg/testcoverage/config.go
index 7334f245..acc6e816 100644
--- a/pkg/testcoverage/config.go
+++ b/pkg/testcoverage/config.go
@@ -22,15 +22,16 @@ var (
 )
 
 type Config struct {
-	Profile            string     `yaml:"profile"`
-	LocalPrefix        string     `yaml:"local-prefix"`
-	Threshold          Threshold  `yaml:"threshold"`
-	Override           []Override `yaml:"override,omitempty"`
-	Exclude            Exclude    `yaml:"exclude"`
-	BreakdownFileName  string     `yaml:"breakdown-file-name"`
-	GithubActionOutput bool       `yaml:"github-action-output"`
-	Diff               Diff       `yaml:"diff"`
-	Badge              Badge      `yaml:"-"`
+	Profile               string     `yaml:"profile"`
+	LocalPrefixDeprecated string     `yaml:"-"`
+	Threshold             Threshold  `yaml:"threshold"`
+	Override              []Override `yaml:"override,omitempty"`
+	Exclude               Exclude    `yaml:"exclude"`
+	BreakdownFileName     string     `yaml:"breakdown-file-name"`
+	GithubActionOutput    bool       `yaml:"github-action-output"`
+	Diff                  Diff       `yaml:"diff"`
+	Badge                 Badge      `yaml:"-"`
+	RootDir               string     `yaml:"-"`
 }
 
 type Threshold struct {
diff --git a/pkg/testcoverage/config_test.go b/pkg/testcoverage/config_test.go
index af7bb6e8..24a686f0 100644
--- a/pkg/testcoverage/config_test.go
+++ b/pkg/testcoverage/config_test.go
@@ -201,10 +201,9 @@ func TestConfigYamlParse(t *testing.T) {
 
 func nonZeroConfig() Config {
 	return Config{
-		Profile:     "cover.out",
-		LocalPrefix: "prefix",
-		Threshold:   Threshold{100, 100, 100},
-		Override:    []Override{{Path: "pathToFile", Threshold: 99}},
+		Profile:   "cover.out",
+		Threshold: Threshold{100, 100, 100},
+		Override:  []Override{{Path: "pathToFile", Threshold: 99}},
 		Exclude: Exclude{
 			Paths: []string{"path1", "path2"},
 		},
@@ -219,7 +218,6 @@ func nonZeroConfig() Config {
 func nonZeroYaml() string {
 	return `
 profile: cover.out
-local-prefix: prefix
 threshold:
     file: 100
     package: 100
diff --git a/pkg/testcoverage/coverage/cover.go b/pkg/testcoverage/coverage/cover.go
index 153730a0..a771c4f2 100644
--- a/pkg/testcoverage/coverage/cover.go
+++ b/pkg/testcoverage/coverage/cover.go
@@ -20,8 +20,8 @@ const IgnoreText = "coverage-ignore"
 
 type Config struct {
 	Profiles     []string
-	LocalPrefix  string
 	ExcludePaths []string
+	RootDir      string
 }
 
 func GenerateCoverageStats(cfg Config) ([]Stats, error) {
@@ -30,7 +30,7 @@ func GenerateCoverageStats(cfg Config) ([]Stats, error) {
 		return nil, fmt.Errorf("parsing profiles: %w", err)
 	}
 
-	files, err := findFiles(profiles, cfg.LocalPrefix)
+	files, err := findFiles(profiles, cfg.RootDir)
 	if err != nil {
 		return nil, err
 	}
@@ -45,7 +45,7 @@ func GenerateCoverageStats(cfg Config) ([]Stats, error) {
 			return nil, fmt.Errorf("could not find file [%s]", profile.FileName)
 		}
 
-		if ok := matches(excludeRules, fi.noPrefixName); ok {
+		if ok := matches(excludeRules, fi.name); ok {
 			continue // this file is excluded
 		}
 
@@ -92,39 +92,47 @@ func coverageForFile(profile *cover.Profile, fi fileInfo) (Stats, error) {
 	}
 
 	s := sumCoverage(profile, funcs, blocks, annotations)
-	s.Name = fi.noPrefixName
+	s.Name = fi.name
 
 	return s, nil
 }
 
 type fileInfo struct {
-	path         string
-	noPrefixName string
+	path string
+	name string
 }
 
-func findFiles(profiles []*cover.Profile, prefix string) (map[string]fileInfo, error) {
+func findFiles(profiles []*cover.Profile, rootDir string) (map[string]fileInfo, error) {
 	result := make(map[string]fileInfo)
-	findFile := findFileCreator()
+	findFile := findFileCreator(rootDir)
 
 	for _, profile := range profiles {
-		file, noPrefixName, found := findFile(profile.FileName, prefix)
+		path, noPrefixName, found := findFile(profile.FileName)
 		if !found {
 			return nil, fmt.Errorf("could not find file [%s]", profile.FileName)
 		}
 
 		result[profile.FileName] = fileInfo{
-			path:         file,
-			noPrefixName: noPrefixName,
+			path: path,
+			name: noPrefixName,
 		}
 	}
 
 	return result, nil
 }
 
-func findFileCreator() func(file, prefix string) (string, string, bool) {
-	cache := make(map[string]*build.Package)
-	files := listAllFiles(".")
+func defaultRootDir(rootDir string) string {
+	if rootDir == "" {
+		rootDir = "."
+	}
+
+	return rootDir
+}
 
+func findFileCreator(rootDir string) func(file string) (string, string, bool) {
+	rootDir = defaultRootDir(rootDir)
+
+	cache := make(map[string]*build.Package)
 	findBuildImport := func(file string) (string, string, bool) {
 		dir, file := filepath.Split(file)
 		pkg, exists := cache[dir]
@@ -147,6 +155,8 @@ func findFileCreator() func(file, prefix string) (string, string, bool) {
 		return file, noPrefixName, err == nil
 	}
 
+	prefix := findModuleDirective(rootDir)
+	files := listAllFiles(rootDir)
 	findWalk := func(file, prefix string) (string, string, bool) {
 		noPrefixName := stripPrefix(file, prefix)
 		f, found := hasFile(files, noPrefixName)
@@ -154,21 +164,21 @@ func findFileCreator() func(file, prefix string) (string, string, bool) {
 		return path.NormalizeForOS(f), noPrefixName, found
 	}
 
-	return func(file, prefix string) (string, string, bool) {
-		if fPath, fNoPrefix, found := findWalk(file, prefix); found { // coverage-ignore
-			return fPath, fNoPrefix, found
+	return func(fileName string) (string, string, bool) {
+		if path, name, found := findWalk(fileName, prefix); found {
+			return path, name, found
 		}
 
-		if fPath, fNoPrefix, found := findBuildImport(file); found {
-			return fPath, fNoPrefix, found
+		if path, name, found := findBuildImport(fileName); found {
+			return path, name, found
 		}
 
 		return "", "", false
 	}
 }
 
-func listAllFiles(rootDir string) []string {
-	files := make([]string, 0)
+func listAllFiles(rootDir string) []fileInfo {
+	files := make([]fileInfo, 0)
 
 	//nolint:errcheck // error ignored because there is fallback mechanism for finding files
 	filepath.Walk(rootDir, func(file string, info os.FileInfo, err error) error {
@@ -179,7 +189,13 @@ func listAllFiles(rootDir string) []string {
 		if !info.IsDir() &&
 			strings.HasSuffix(file, ".go") &&
 			!strings.HasSuffix(file, "_test.go") {
-			files = append(files, path.NormalizeForTool(file))
+			name, _ := strings.CutPrefix(file, rootDir)
+			name = path.NormalizeForTool(name)
+
+			files = append(files, fileInfo{
+				path: file,
+				name: name,
+			})
 		}
 
 		return nil
@@ -188,16 +204,16 @@ func listAllFiles(rootDir string) []string {
 	return files
 }
 
-func hasFile(files []string, search string) (string, bool) {
+func hasFile(files []fileInfo, search string) (string, bool) {
 	var result string
 
 	for _, f := range files {
-		if strings.HasSuffix(f, search) {
+		if strings.HasSuffix(f.name, search) {
 			if result != "" {
 				return "", false
 			}
 
-			result = f
+			result = f.path
 		}
 	}
 
diff --git a/pkg/testcoverage/coverage/cover_test.go b/pkg/testcoverage/coverage/cover_test.go
index 6d6c4e65..87fb1e6b 100644
--- a/pkg/testcoverage/coverage/cover_test.go
+++ b/pkg/testcoverage/coverage/cover_test.go
@@ -24,6 +24,8 @@ const (
 
 	prefix        = "github.com/vladopajic/go-test-coverage/v2"
 	coverFilename = "pkg/testcoverage/coverage/cover.go"
+
+	rootDir = "../../../"
 )
 
 func Test_GenerateCoverageStats(t *testing.T) {
@@ -39,12 +41,18 @@ func Test_GenerateCoverageStats(t *testing.T) {
 	assert.Empty(t, stats)
 
 	// should get error parsing invalid profile file
-	stats, err = GenerateCoverageStats(Config{Profiles: []string{profileNOK}})
+	stats, err = GenerateCoverageStats(Config{
+		Profiles: []string{profileNOK},
+		RootDir:  rootDir,
+	})
 	assert.Error(t, err)
 	assert.Empty(t, stats)
 
 	// should be okay to read valid profile
-	stats1, err := GenerateCoverageStats(Config{Profiles: []string{profileOK}})
+	stats1, err := GenerateCoverageStats(Config{
+		Profiles: []string{profileOK},
+		RootDir:  rootDir,
+	})
 	assert.NoError(t, err)
 	assert.NotEmpty(t, stats1)
 
@@ -52,38 +60,30 @@ func Test_GenerateCoverageStats(t *testing.T) {
 	stats2, err := GenerateCoverageStats(Config{
 		Profiles:     []string{profileOK},
 		ExcludePaths: []string{`cover\.go$`},
+		RootDir:      rootDir,
 	})
 	assert.NoError(t, err)
 	assert.NotEmpty(t, stats2)
 	// stats2 should have less total statements because cover.go should have been excluded
 	assert.Greater(t, StatsCalcTotal(stats1).Total, StatsCalcTotal(stats2).Total)
 
-	// should remove prefix from stats
-	stats3, err := GenerateCoverageStats(Config{
-		Profiles:    []string{profileOK},
-		LocalPrefix: prefix,
-	})
-	assert.NoError(t, err)
-	assert.NotEmpty(t, stats3)
-	assert.Equal(t, StatsCalcTotal(stats1), StatsCalcTotal(stats3))
-	assert.NotContains(t, stats3[0].Name, prefix)
-	assert.NotEqual(t, 100, StatsCalcTotal(stats3).CoveredPercentage())
-
 	// should have total coverage because of second profile
-	stats4, err := GenerateCoverageStats(Config{
+	stats3, err := GenerateCoverageStats(Config{
 		Profiles: []string{profileOK, profileOKFull},
+		RootDir:  rootDir,
 	})
 	assert.NoError(t, err)
-	assert.NotEmpty(t, stats4)
-	assert.Equal(t, 100, StatsCalcTotal(stats4).CoveredPercentage())
+	assert.NotEmpty(t, stats3)
+	assert.Equal(t, 100, StatsCalcTotal(stats3).CoveredPercentage())
 
 	// should not have `badge/generate.go` in statistics because it has no statements
-	stats5, err := GenerateCoverageStats(Config{
+	stats4, err := GenerateCoverageStats(Config{
 		Profiles: []string{profileOKNoStatements},
+		RootDir:  rootDir,
 	})
 	assert.NoError(t, err)
-	assert.Len(t, stats5, 1)
-	assert.NotContains(t, `badge/generate.go`, stats5[0].Name)
+	assert.Len(t, stats4, 1)
+	assert.NotContains(t, `badge/generate.go`, stats4[0].Name)
 }
 
 func Test_findFile(t *testing.T) {
@@ -95,23 +95,26 @@ func Test_findFile(t *testing.T) {
 
 	const filename = "pkg/testcoverage/coverage/cover.go"
 
-	file, noPrefixName, found := FindFile(prefix+"/"+filename, "")
+	findFile := FindFileCreator("../../../")
+	findFileFallbackToImport := FindFileCreator("")
+
+	file, noPrefixName, found := findFile(prefix + "/" + filename)
 	assert.True(t, found)
 	assert.Equal(t, filename, noPrefixName)
 	assert.True(t, strings.HasSuffix(file, path.NormalizeForOS(filename)))
 
-	file, noPrefixName, found = FindFile(prefix+"/"+filename, prefix)
+	file, noPrefixName, found = findFileFallbackToImport(prefix + "/" + filename)
 	assert.True(t, found)
 	assert.Equal(t, filename, noPrefixName)
 	assert.True(t, strings.HasSuffix(file, path.NormalizeForOS(filename)))
 
-	_, _, found = FindFile(prefix+"/main1.go", "")
+	_, _, found = findFile(prefix + "/main1.go")
 	assert.False(t, found)
 
-	_, _, found = FindFile("", "")
+	_, _, found = findFile("")
 	assert.False(t, found)
 
-	_, _, found = FindFile(prefix, "")
+	_, _, found = findFile(prefix)
 	assert.False(t, found)
 }
 
diff --git a/pkg/testcoverage/coverage/export_test.go b/pkg/testcoverage/coverage/export_test.go
index e51bcf27..2fbbdcfb 100644
--- a/pkg/testcoverage/coverage/export_test.go
+++ b/pkg/testcoverage/coverage/export_test.go
@@ -1,7 +1,7 @@
 package coverage
 
 var (
-	FindFile           = findFileCreator()
+	FindFileCreator    = findFileCreator
 	FindAnnotations    = findAnnotations
 	FindFuncsAndBlocks = findFuncsAndBlocks
 	ParseProfiles      = parseProfiles
diff --git a/pkg/testcoverage/coverage/module.go b/pkg/testcoverage/coverage/module.go
new file mode 100644
index 00000000..0d2f3cb9
--- /dev/null
+++ b/pkg/testcoverage/coverage/module.go
@@ -0,0 +1,55 @@
+package coverage
+
+import (
+	"bufio"
+	"os"
+	"path/filepath"
+	"strings"
+)
+
+func findModuleDirective(rootDir string) string {
+	goModFile := findGoModFile(rootDir)
+	if goModFile == "" {
+		return ""
+	}
+
+	return readModuleDirective(goModFile)
+}
+
+func findGoModFile(rootDir string) string {
+	var goModFile string
+
+	//nolint:errcheck // error ignored because there is fallback mechanism for finding files
+	filepath.Walk(rootDir, func(file string, info os.FileInfo, err error) error {
+		if err != nil { // coverage-ignore
+			return err
+		}
+
+		if info.Name() == "go.mod" {
+			goModFile = file
+			return filepath.SkipAll
+		}
+
+		return nil
+	})
+
+	return goModFile
+}
+
+func readModuleDirective(filename string) string {
+	file, err := os.Open(filename)
+	if err != nil { // coverage-ignore
+		return ""
+	}
+	defer file.Close()
+
+	scanner := bufio.NewScanner(file)
+	for scanner.Scan() {
+		line := scanner.Text()
+		if strings.HasPrefix(line, "module ") {
+			return strings.TrimSpace(strings.TrimPrefix(line, "module "))
+		}
+	}
+
+	return "" // coverage-ignore
+}
diff --git a/pkg/testcoverage/report.go b/pkg/testcoverage/report.go
index ae3ef13b..4568e251 100644
--- a/pkg/testcoverage/report.go
+++ b/pkg/testcoverage/report.go
@@ -166,6 +166,10 @@ func ReportForGithubAction(w io.Writer, result AnalyzeResult) {
 	}
 }
 
+func reportGHWarning(out io.Writer, title, msg string) { // coverage-ignore
+	fmt.Fprintf(out, "::warning title=%s::%s\n", title, msg)
+}
+
 const (
 	gaOutputFileEnv       = "GITHUB_OUTPUT"
 	gaOutputTotalCoverage = "total-coverage"