This has been a very interesting thread. I've been impressed with a lot of the input on here. Thanks for the education.
I intended to look through the accounts myself and try and make some sense from them, with regards to understanding the recorded loss vs club value.
Firstly, I want to state I'm not a qualified accountant (so I'm happy to be corrected with any inaccuracies I state, or mistaken definitions).
Note: I only looked into the last five years.
Ok... What did I notice that was worthy of mention...
The current outstanding debt (to be repaid, not converted to shares) noted on the latest annual accounts totalled £13.9M.
The account balance at the time (cash in the bank) showed as £3.3M.
This concluding a net available cash position of (-£10.6M).
Over the last five years the club has published accounts showing a £74M loss.
This suggests that our investors have picked up ~£64M of those costs and converted to shares, in the five year period.
Interestingly of note, I decided to calculate the squad value for each season, totalling estimated values (only for players owned by the club, so excluding loans).
I used Transfermarkt as my source for this. Yes, I know they are far from perfect, however they had the data required and they are an unbiased source.
Transfermarkt valued our squad value at £86.4M for 20/21 season (same period of last published accounts). In season 16/17 (the same time period as the earliest accounts I reviewed) they valued the squad at £12.1M.
This difference is a squad value that has increased by ~£74M. Interestingly this figure is the same as the loss for that five year period. This suggests the costs have been balanced off by the increase in squad value, meaning the shareholders have a good representation of money invested reflecting the current club value (therefore share value), due to the increase in asset values.
I appreciate this is a fairly simplistic view, and doesn't consider fluctuation in other assets (i.e. Ibrox, Training Centre, Edminston House, etc.). Then there are many other factors that affect value that I've excluded.
Furthermore, by reviewing the accounts it highlighted that the club hasn't been growing in value in a cash sense, but has been in an asset sense. Any cash shortfalls have often been covered by investors and loans. This probably explains why there aren't available funds to go spending big in this transfer window. This cash will only become available from any profit returned this year. However, and purely speculative, I'd be surprised if this generates much cash to spend after covering the debt on the books. Maybe £5M-£10M (a bit of a guess, without seeing actual accounts). Otherwise we will need to generate more cash to spend with more loans, investment, or player sales.
To summarise, I was comforted with the club position based on the increase I've assumed in the club value, and that justifying the losses over the past five years. However, that could suddenly change with our three most valuable assets (according to Transfermarkt) all potentially leaving the club for nothing next year. So contract extensions, or sales of these players (close to their valuations), is important to secure the club value/balance sheet.