Hibernian have reported a loss of £900,000 for the year ending July 2011, the first time in seven years they have failed to end a year in profit.
The club say that turnover has reduced to £7m, a drop of £100,000 with net debt standing at £5.9m.
Chairman Rod Petrie believes matters on the pitch are at least partly to blame for their financial situation.
"The sporting outcomes for the season were not what any of us would have wished," he said in a statement.
"The team exited two competitions before the change in management and suffered the disappointment of an exit from the third competition in early January before new manager Colin Calderwood was able to refresh the squad."
Hibs are currently one point off the bottom the of the Scottish Premier League table, on the first anniversary of Calderwood's appointment.
In releasing their results the club also point to a "lack of player trading" adding to their difficulties, although fees were garnered for Anthony Stokes, Sol Bamba and Merouane Zemmama.
Attendances at Easter Road have dipped, with the club making a poor start to this season, but overall Petrie is content with the financial situation.
"Despite the figures recorded last year, the financial position of the club is secure," he added.
"To address the imbalance between income and expenditure the board took action earlier this year - costs have had to be cut.
"This has meant re-structuring the club from board level down, including redundancies and not replacing posts that were vacated through natural wastage.
"This is the third year in succession that there has been no increase in staff salaries."
Staff costs remain static at £4.8m, although that figure represents a ratio of 69% to turnover.