Mike Ashley's Newcastle is fast approaching the break-even point after reporting an operating loss of £3.9million.
The Magpies, who lost £33.5million in 2009-10 and £37.7million 12 months earlier, reduced those figures to below £4million after amortisation in 2010-11, their strongest financial showing for several years.
Significantly, wages accounted for 60.6% of a turnover which rose by 69% from £52.4million to £88.4million, where in 2008-09, the season they were relegated from the Barclays Premier League, the ratio was 82.7%.
Managing director Derek Llambias said: "The club's financial results for the year end June 2011 are extremely strong. We can now count ourselves amongst very few clubs across the UK and Europe who are operating at close to break-even.
"What is particularly pleasing is that we have achieved this whilst also ensuring we have a strong squad sitting firmly in the top third of the table and currently pushing for a European place.
"Some of the key financial principles we set in place when Mike bought to the club back in 2007 are now beginning to reap rewards, most notably our adherence to a strict transfer policy which avoids, or limits wherever possible, the acceptance of dated payments for players bought or sold.
"We believe it is a far healthier financial model to settle full transfer fees for players up front, not dated over a period of years. We have dealt wisely in the transfer market and reinvested the income received from player sales into improving the squad."
The net cash spend on player transfers, including Andy Carroll's £35million departure of Liverpool in January last year, was a receipt of £5.4million, although the Magpies have since invested a further £25million in transfers and wages.
In addition, when Ashley took over the club in 2007, it owed £36million in deferred payments for players; the club is now owed £5million.
Newcastle have also cleared all of their third-party debts, which amounted to £76million in 2006-07, and its borrowing from Ashley in terms of interest-free loans remains at £140million.