Thread by @MoChatra

Lots of people have been asking me to clarify #LFC's financial standing and its position to compete in the transfer market. Is the money really there or is the club leading fans down the garden path?

In the 16/17 season/financial year, the club generated total revenues from broadcast fees, commercial and matchday income of £364m. Its operating expenses were £357m, but sizeable profits from transfer activities meant the total profit was £39m.

Transfer income and expenditure is dealt with on the balance sheet and not in the profit and loss account because players are classed as assets, and the balance sheet is a statement that sets out any company's assets, liabilities and capital.

So when Liverpool talked about wanting to sign Keita and van Dijk last summer, that £39m was available to spend on initial instalments- it was absolutely viable for the club to sign the players in that window.

Let's fast forward to this summer with the 17/18 season and financial year now concluded. I estimate that LFC's turnover was likely in excess of £450m- an increase of at least £86m on 16/17.

In 17/18, the club earned £68m in prize money from the Champions League. The club also played four more home games, signed new commercial deals and clearly sold huge amounts of merchandise due to the club celebrating its 125th anniversary.

On top of that, the sale of Philippe Coutinho should ensure profits from transfer activities are transferred from the balance sheet to the profit and loss account to bolster the bottom line. At the same time, the only big contract renewal was Roberto Firmino's at season's end.

On that basis, even factoring in growth in performance-related bonuses for reaching the Champions League final, the club almost certainly turned a record profit (the previous record was circa £60m in 14/15) which could be in the region of £100m.

This follows on from the club having generated profits of circa £80m over the previous three seasons (14/15-16/17). This means the club finds itself in a position of unprecedented financial strength; the funds are absolutely there for Michael Edwards to make big deals.

However, though the club has significant surplus monies at its disposal, there are other factors to consider. Key players are being signed to huge new deals which will result in a sizeable increase to the wage bill.

The loan to fund the Main Stand expansion needs to be repaid so the club's accountants are no doubt looking to use some of the proceeds to reduce that debt.

The new club shop had to be paid for during the 17/18 season and there might be the intention to pay for the Kirkby redevelopment wholly from surplus revenues and therefore not increase any existing credit facilities.

Even when these commitments are taken into account, there should still be enough funds available to address what many supporters consider to be essential additions- the recruitment of a new goalkeeper and an attacking mid. Is the money there to do those deals? Almost certainly.

For the sake of argument, if the club's aim is to sign Nabil Fekir as the new attacking mid and Alisson as the goalie, the combined value of those deals could easily amount to £120m. Assuming that figure can be paid over instalments, the club would need circa £40m this summer.

In the case of Fekir, the deal has been complicated due to reported issues over the medical. The issue with Alisson is the transfer fee. Liverpool can pay Roma's full asking price- the club do not want to pay what they consider to be an over-inflated valuation, however.

Should Liverpool significantly over-pay for a new goalkeeper- especially given the club did just that in January for van Dijk and reversed that position to vastly overcharge Barcelona for Coutinho that same month?

It all depends on the club's view on its current collection of 'keepers and the perceived difference Klopp and co. feel a newcomer could make. However, one thing is for sure- any potential deal for Alisson isn't being held up because the club doesn't have money. It has shitloads.