The January transfer window allowed only further adversity to crowd into Ally McCoist's working life.

His squad is smaller, he has lost his leading goalscorer, and the club's financial constraints have now been laid bare. Five days ago, the Rangers manager reacted to questions about the possibility of him walking away with a grimace and a refusal to even allow the rumours credence. His emotional attachment to the club is significant, but sentiment will be of little value now that the title defence has been hindered.

McCoist is essentially managing decline. In the space of one month, his worst fears have been confirmed, with the sale of Nikica Jelavic to Everton, for a fee believed to rise to £6m but delivering as much as £5m up front, generating no funds for the Rangers manager to spend. He has always stressed that he talks regularly with Craig Whyte, the chairman, so it would not have come as a surprise, but the bare truth is that McCoist has been left to marshal a weakened team.

Walter Smith admitted in a weekend interview that he feared Rangers could return to the kind of barren spell that preceded the arrival of Graeme Souness and a new era of bold spending in 1986. Smith remains close to McCoist and he would not have made the observation if he thought it would be damaging to his friend. Like Steve Lomas' outburst following Rangers' victory over St Johnstone that the Ibrox side were acting like a "small club" in their pursuit of the Perth club's striker Fran Sandaza, the comments clarified the distinction between McCoist's ambitions in the transfer market and the constraints being applied to him in the boardroom.

The Rangers manager remains a diplomatic and optimistic figure, but he must feel increasingly burdened. The club's decision to sell Jelavic may have been prompted by financial obligations, but the failure to replace him diminishes Rangers' chances of retaining the championship. Celtic have strengthened their squad, stockpiling strikers while the Ibrox side must rely on David Healy, a 32-year-old penalty-box poacher who has previously been a marginal presence, to play up front. Kyle Lafferty is due to return from a torn hamstring in five weeks, but he tends to veer between effectiveness and fickleness even when he is fully fit.

McCoist is not without responsibility, since some of his summer arrivals have made little impact. Juanma Ortiz has already returned to his former club, Almeria on loan, while Matt McKay and Alejandro Bedoya continue to underwhelm. The Rangers manager has pointed out that Dorin Goian and Carlos Bocanegra have thrived in defence, and that not every signing will succeed, but the failures have been cast in a more critical light.

Qualifying for the group stages of either the Champions League or the Europa League would also have improved, albeit relatively, the club's financial circumstances. The defeats to Malmo and Maribor now seem more damaging. Yet the revelation that Whyte has arranged loans against season ticket sales for coming seasons confirms that there are no resources for the manager to call upon. Decisions made in the boardroom seem shaped by financial rather than football considerations.

The club's training ground has been strewn with trialists, but the inability to offer Enar Jaager, the Estonian full-back, a contract, then Jorge Claros, the Honduran midfielder who has now signed for Hibernian, are mortifying for a club that has one of the largest fanbases in Britain. Only Sone Aluko has impressed since arriving as a trialist, and his performances since signing a short-term deal have been encouraging, particularly his ability to play as a second striker as he did in the 4-0 win over Hibs last Saturday.

McCoist will continue to be bullish, and he has stressed his conviction that the squad is still good enough to win the title even without Jelavic. Yet the Croat was one of four vital players at the beginning of this campaign; another, Steven Naismith, is injured, leaving the team reliant on Allan McGregor, the goalkeeper, and Steven Davis, the midfielder.

It is up front that Rangers are desperately short of options. Unattached players can still be signed outwith the transfer window, but while Celtic's leading two strikers – Gary Hooper and Anthony Stokes – can claim 33 goals between them already this season, Healy has struck three times so far, and Lafferty six. The pursuit of Grant Holt, the Norwich striker, did not move beyond the offer that was rejected yesterday, while no return seems to have been made to Sandaza after he turned down the offer of a pre-contract. Along with the futile pursuit of David Goodwillie last summer, the perception is of Rangers being unable to be decisive in their transfer dealings.

McCoist has also allowed several of the club's promising young players to leave on loan, with John Fleck, an attacker, now at Blackpool, Kyle Hutton at Dunfermline, Darren Cole at Partick Thistle, and Jordan McMillan having moved to East End Park on a permanent, but short-term contract. Others remain, and Kane Hemmings, a quick but inexperienced young striker, may find himself more involved.

Salim Kerkar remains the only other option up front, and McCoist seems left with a functional side. The left flank tends to be filled by two defenders, in Sasa Papac and Lee Wallace, and Kyle Bartley is currently being used out of position at right-back. McCoist is managing through compromise, and must feel isolated at times by the decisions being made above him in the boardroom.

With a judgment to be delivered in the tax dispute with HMRC in the coming months, and the prospect of administration seeming ever more likely, his growing fear must be that what he faces next is a bout of crisis management.