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I know we've had a few debates about finances recently but im hoping this grim picture painted by one of them is more in hope than in fact. While income and expenditure both turned slightly against Celtic last season, it was bonanza time at Ibrox where Rangers published record turnover as a result of the double bounty; Champions League group stage income followed by a run to the Uefa Cup final in Manchester. Celtic turnover (t/o) was �£75.237m compared to Rangers �£64.452m, but Rangers outsource their merchandising operation, including only a licence payment from JJB Sports in the figures, whereas the Celtic figure includes total income from merchandising sales. Celtic earned �£16.092m from merchandising sales, contributing a margin of �£4.8m in a financial year without the release of a new home shirt. When Rangers signed the JJB deal in 2006 they revealed they would earn �£3m each year, plus �£1.45m amortised in the Profit and Loss account (P&L) but paid at the start of the contract in 2006, criteria was in place to provide for bonus payments should unspecified targets be achieved. It was, therefore, with some astonishment that no bonus payments were earned, despite the unprecedented proliferation of Rangers merchandise walking the streets ahead of the Manchester riot. I understand that the bonus is dependent on progress to the latter stages of the Champions League, which ironically would have sold a lot less kit for JJB; it appears Rangers had overlooked a clause for Uefa Cup progress. The big area of interest from a financial statement is the indication of where a company is heading next. Celtic will earn at least �£70m this season but if they finish higher than bottom place in the Champions League group stage they should reach �£75m. By contrast, Rangers are looking at financial Armageddon. In 2004-05 they earned �£34.48m (from continuing operations), a whopping �£30m less than last season, but 2004-05 included four home European games, each with TV rights, compared to only one this season. �£34m will be the upper limit of their income potential this season; it will be less still, unless a good run in the domestic cups includes high-earning home games, a whole �£40m less than what I expect from Celtic and still �£28m less than the Celtic figure adjusted for comparable merchandise income. Celtic salary costs were �£38.981m, a �£2.5m increase on the previous season, compared to �£34.339m at Rangers, up a massive �£10.1m on 2007. The latter figure will in part reflect incentive payments for European progress, although the clutch of new signings who arrived at the club in 2007 will make up the bulk of the increase. In a masterstroke of business acumen, Rangers chief executive, Martin Bain, appears to have included the Uefa Cup in bonuses to be paid, but not on bonuses earned. I was delighted to learn that Rangers pay more for the remarkably unpopular Bain (�£668k) than Celtic pay for 'Self Appointed Football-Integrity Judge and Jury' (W.Smith), Peter Lawwell (�£514k). Although perhaps Bain's remuneration also reflected Uefa Cup progress. You would think that with such big numbers flowing into his own bank account the whole 'What will be get if we do well in the Uefa Cup?' question would be at the front of his mind when he negotiated with JJB. Football club's P&L income figures do not include player sales, with are recorded on the balance sheet, so Rangers sale of Cuellar will bring in �£7.8m more than the income figure, which itself will be offset in cash terms by the �£1.45m banked back in 2006 from JJB. Before they start to spend on extravagances like footballers, clubs have considerable costs to pay. Rates, electricity, property maintenance, policing, to name only a few, cost Celtic �£15.395m. Rangers figure was higher than this, perhaps as a result of exceptional items resulting from the run to the Uefa Cup final, so the previous year's cost of �£16.262m will be a better indicator of costs this year, which is just �£18m less than their anticipated income available for football and other operations. By comparison, Celtic will have in the region of �£45m available for football and other operations when adjusted for the merchandise sales difference. Net bank debt at Celtic was �£3.52m compared to Rangers' �£21.559m but while Celtic are set to come out of debt in May (barring an exceptional expense in January), Rangers net year-end debt is likely to rise beyond �£30m unless significant steps are taken to sell players in January. Celtic are in an exceptionally strong financial position. They can survive the vagaries of football fortune, or economic downturn, without the threat of cutback should income dip. Conversely, Rangers are in dire trouble. This year will not be financially the worst Sir David Murray has bestowed on his club, but it will make for horrendous reading to any prospective buyer of the club and provide further evidence that they are hopelessly adrift of financial security. Winning the league this season and qualifying for next season's Champions League will not provide succour from their structural problems, it would only result in a temporary slowdown in decline. Rangers debt has risen inextricably, and is set to continue to rise, at a time when bank facilities have become more difficult and expensive to acquire. Should new HBOS owners, Lloyds TBS, take fright at the property-to-football conglomerate, Murray International Holdings, which includes Rangers, frankly, the consequences are so dramatic, I don't think we should discuss them, as I have trouble sleeping when I get too excited. We live in a time when things which simply cannot happen, happen. When some of last year's most credit-worthy companies in the world have gone into receivership; when one of the centuries-old pillars of the Scottish business community crumbled in days. No company dependent on a significant increase in its debt is safe. Rangers Football Club, 1873 - 20??