Manchester City have said that they are confident of breaking even next year and will be able to comply with UEFA's Financial Fair Play rules.
The Premier League club have halved their losses for the second year in a row, recording a deficit of £51.6m for last season.
City also registered an annual turnover of £271m for 2012-13, an increase of £40m from the previous campaign.
"Growing revenues and controlled expenses are bringing the club to break-even in the immediate future and profitability thereafter," PA quotes the club's chief executive Ferran Soriano as saying.
City chairman Khaldoon Al Mubarak has also made optimistic remarks about the club's future.
"We have every reason to be optimistic," he wrote in the club's annual report. "The core group of players we have assembled in recent years has shown that it has what it takes to prevail in the most challenging of circumstances.
"With the arrival of Manuel Pellegrini and the further strengthening of our squad, Manchester City has entered the 2013-14 season with a renewed sense of confidence for the future. The club has made no secret of the fact that winning championships is at the heart of its strategy.
"However, we are also seeking to create teams that play creative, entertaining football, and at the same time to continue to build a socially responsible and commercially successful off-field operation to harness the opportunities generated by our on-pitch performance."
City are currently a point clear at the top of the Premier League.
