City made a £10.7million profit in the 2014-15 season despite failing to win a trophy - figures which highlight how the club have been able to free themselves of any UEFA financial fair play sanctions.
The club reprted record revenues of £351.8million, up from £347million, but significantly have cut costs including reducing the wage bill for a second successive year
The wage bill is down to £193.5million compared to £205million a year before - Manchester United's is £203million and Arsenal's is £192.2million
The most recent figures for Chelsea's wage bill are £192.7million for the 2013-14 season.
City hailed the profit as an "historical step" but chairman Khaldoon Al Mubarak said the lack of silverware last season remained a cause for disappointment, a statement which may serve as something of a warning to manager Manuel Pellegrini.
Khaldoon said: "The fact that we consider last season to be below par for Manchester City is a testament to how far we have come in the last seven years. This is a level of ambition that we should not shirk or shy away from.
"It is right to have high expectations for this great club and the talented group of players chosen to represent it.
"No team can expect to win every year, but competing to win in England's domestic competitions and improving our performance in the UEFA Champions League are entirely reasonable goals for Manchester City.
"The desire for silverware has always been a critical element of His Highness Sheikh Mansour bin Zayed's strategy for the reinvigoration of Manchester City FC both on and off the pitch.
"To put things in their simplest terms, we are now a profitable business with no debt and no outstanding restrictions."
Chief executive Ferran Soriano said the opening of the City Football Academy last December was a significant step and the expansion of the Etihad Stadium to a 55,000 capacity would generate more income.
He added: "The 2014-15 season marked a historical step in Manchester City's journey."
City's financial results show the club are now competing with neighbours Manchester United off the pitch as well as on it
Overall revenue is in the same ball-park (£351.8million compared to United's £395million), the wage bill is similar but City do not have to pay anything in debt repayments.
Source: PA