A trophy isn't a measure of improvement (whilst rare these days for one to be won by a team outside of the top 4), domestic league position & CL position is the defining measure of how good a team is.
Real Madrid is a really intriguing club right now, they bought massively 4,5,6yrs ago and by and large built the team they have had for the past 3yrs, winning 3 back to back CL's in the process, although not delivering a league title is poor for a club with their resources and in a 2 team league (Atleti are still miles behind in the money). So, it is fascinating to see if those kids they have been hoovering up actually make it in to the first team and replace the likes of Ronaldo, Modric, Ramos, Marcello etc... as they move nearer to the end of their effective careers at the top. Or, will they have another period of spending big for number of years building a new team all over again.
I keep hearing things in the press about their finances aren't great but then I've heard this about them for decades too. I suspect they are preparing for a big spend up.(??)