Chelsea said they were in a strong position to meet UEFA's new financial rules on Monday despite announcing an overall loss of almost $150 million in the year ending June 30, 2010.
The west London club, who won the league and FA Cup double last season, said they had become "cash positive" for the first time since Russian oligarch Roman Abramovic bought it in 2003 and turned them into title winners on the back of a raft of big-money transfers.
The club's latest figures, disclosed on the day Chelsea were poised to break the British transfer record to sign Liverpool's Spanish striker Fernando Torres, showed a positive cash flow of 7.87 million pounds compared to a net outflow of 35 million in the previous year when they also posted an operating loss of around 150 million pounds.
Chief executive Ron Gourlay told the club's website that Chelsea is in a strong position to meet the challenges of UEFA financial fair play initiatives.
Those fair play rules are designed to stop clubs spending more than their income.