A record Ã0Â£23.2million operating profit - up 52% on the previous year - also highlights the figures, which enabled the RFU to distribute Ã0Â£18.9million to member clubs and constituent bodies.
The RFU now has a net worth of Ã0Â£105.5million, ahead of constructing a new South Stand at Twickenham, with initial work already underway.
Revenue, meanwhile, increased from Ã0Â£72.3million to Ã0Â£84.8million due to growth in ticket, broadcasting, sponsorship and hospitality income, with cash balances showing an Ã0Â£11.4million rise, while costs went up from Ã0Â£57million to Ã0Â£61.6million.
"Following the losses inevitably incurred last year due to the impact of the 2003 Rugby World Cup on the match programme and the costs of the senior team, the Union returned to profitability in 2004/05 with a solid financial performance on most fronts," said RFU financial director Nick Eastwood.
"We have continued to strengthen our balance sheet with consolidated net worth increasing by Ã0Â£14.1million from Ã0Â£91.4million to Ã0Â£105.5million, and year-end cash balances standing at Ã0Â£43.8million.
"This gives us a solid foundation from which to undertake the construction and financing of the South Stand project, and 2005/06 will see very significant capital expenditure on the project."
RFU chief executive Francis Baron added: "We have been able to distribute a record amount of Ã0Â£18.9million to member clubs, an increase of 16% on last year.
"In addition, the Rugby Football Foundation has invested Ã0Â£1.6million in club development projects, Ã0Â£1.2million in the form of interest-free loans and Ã0Â£400,000 as grants, and a further Ã0Â£7million has been raised from other sources for investment in the community game."