Boosted by its first Champions League title, Chelsea has made an annual profit for the first time in the nine-year reign of Russian billionaire owner Roman Abramovich.
After eight years and a total of 630 million pounds ($1 billion) in losses since the Russian took over at Stamford Bridge, the club's success in the Champions League finally pushed it into the black.
The English Premier League club announced a profit of 1.4 million pounds ($2.2 million) through June 30, compared to a 67.7-million pound ($109 million) loss in the previous financial year.
Chelsea made about 48 million pounds ($77 million) from its successful Champions League campaign, which ended in a victory over Bayern Munich in Munich, and 28.8 million pounds ($46 million) from dealings in the transfer market.
The signings of Juan Mata and Gary Cahill took place during the year while there was income from sales, mainly from of Alex and Yuri Zhirkov. In terms of accounting, however, the transfer fees are spread out across the length of a player's contract rather than hitting the accounts in one lump sum.
The challenge for Chelsea will be to try and stay in or close to the black in this current year if it does not have the same income from the Champions League or FA Cup wins -- the signings of Eden Hazard, Oscar and Victor Moses will then be part of the accounts.
The profit for the year ending June 30, 2012, might not be that big, but in terms of complying with UEFA's financial fair play rules, it is a hugely important result for the London club.
The profit "puts the club in a strong position to comply with UEFA financial fair play criteria for the coming seasons," a Chelsea statement said. "The club also enjoyed an uplift in revenues from commercial activities including new partners and merchandising."
The statement added that club's debt, in the form of loans from Abramovich, has been turned into equity during the course of the year "making Chelsea FC plc debt free".
Their record turnover of 255.7 million pounds ($406.9 million) sees Chelsea leapfrog Arsenal and secure further bragging rights in the capital. Chelsea brought in the fifth most revenue in the world behind Real Madrid, Barcelona, Manchester United and Bayern Munich.
"We will never forget that night in Munich and now we are celebrating serious progress off the field too," club chairman Bruce Buck said. "While we draw huge satisfaction from the achievements of the past 12 months we are more than ever focused on continuing the story of on-field success supported by improving financial performance off the pitch."
Information from Press Association and The Associated Press was used in this report.