The first graph shown below represents the value of the assets of the business against the money it owes.
Back in 1998 the club was worth just over £100m. The decline under the stewardship of Freddie Shepherd is plain to see. In 2007 for the first time the club owed more than it had assets. This meant that if the ground, and all the players were sold off it wouldn't cover the amounts of money owed to various people. When this happens it becomes very difficult to borrow more money from the bank, as there is nothing left to borrow against. In 2006 this meant the club had to go to Northern Rock and ask for its sponsorship money early rather than the planned for spread over a few years.
Matching up with this is the net debt figure. This is all the total of all the borrowings the club has. The bigger the debt figure the worse things are. The graph again highlights how the debt has nearly doubled in two years. In 1998 the club had £24m in the bank, in 2007 the club owed £70m.
All these debts needed to be paid off when Ashley bought the club.
