Everton manager Carlo Ancelotti says he hopes his side will "soon" be competing for the Premier League title.
Having taken over from Marco Silva in December with Everton just four points clear of the relegation zone, Ancelotti has guided the club to safety and the fringes of the race for a Europa League qualification spot.
- £18 Premier League and Football channel offer
- Ancelotti hopeful Baines will extend contract
- Ancelotti: Klopp has built the perfect machine
The Italian, who won the Premier League as Chelsea boss in the 2009/10 season, believes Everton's young squad have the potential to develop into title challengers.
"I hope soon Everton has to be competitive and fight for the first position of the Premier League with Liverpool, with Chelsea, with Tottenham, with Manchester United, with all the big teams," Ancelotti told Sky Sports News.
"I don't know how long it takes but I hope that soon we are able to compete.
"We have a young squad with young players with a lot of skills, a lot of ability. I think just the fact that we can improve this skill and this ability can give us more opportunity to stay at the top."
Merseyside rivals Liverpool last week claimed a first top-flight title for 30 years, and Ancelotti believes Everton can learn from their neighbours.
"I think that Liverpool did a fantastic job in the last five years," Ancelotti said. "When Jurgen came, and year-by-year they improved their squad.
"I think this is the way that we have to follow - to improve the squad year-by-year.
Ancelotti insists that Everton do not require "a lot" of signings to be able to compete at the top of the table, but appeared to confirm the club's interest in Lille defender Gabriel Magalhaes.
Everton were one of four clubs to make an offer for the Brazilian centre-back in March, with Magalhaes finally expected to make a decision over his future in the first week of July.
Asked what the chances are of Magalhaes joining Everton, Ancelotti said: "You have to ask him.
"Honestly, we are looking around - this is absolutely normal as all the teams do at the moment - but the squad, the manager, the staff are focused on finishing the season."