Liverpool have announced that the club's debts increased by £21.8m between the period of August 2011 to May 2012.
The Merseyside outfit, who were taken over by Fenway Sports Group, led by John Henry, in 2010, recorded debts of £87.2m due to last season's squad rebuilding without the financial backing of Champions League football.
"We will continue to invest in the squad, I think that is what our fans would expect," Liverpool managing director Ian Ayre told the Liverpool Echo. "But the most important thing is that we do it prudently and in a sustainable way that is affordable. And that we all have our sights on the same goal - success.
"The key message for me is that we are continuing to transition to the point we have been working on for several years under this ownership, which is to continue to improve revenues and manage our cost base effectively.
"The biggest cost base without doubt is player trading and player wages, but these accounts demonstrate that we are still working hard to improve that."
Despite the increase of net debt, turnover improved by £5m on the previous year.