Your manufacturing business has net assets of $100 million, $25 million of equity and $5 million of long term debt. Current liabilities are $70...

There are three basic ways for a business to finance new expenses:

1. Spend cash on hand
2. Sell assets (including things like stock issues)
3. Take out loans

Since this company does not appear to have any cash on hand, that's not an option.

Selling assets is a promising option, since we have $90 million in current assets (remember that current assets by definition can be liquidated at market value within one year).

Taking out loans is less promising, as we have $70 million in current liabilities. Taking on even more liabilities might be unwise, depending on what our debt service looks like.

The right choice depends on a lot of different factors, but ultimately it all comes down to a simple question:
Which will end up costing more?

If interest rates on debt are very low, it might make sense to take on more loans. If interest rates are high, debt service will be more expensive and more debt might not be a good idea.

If we expect our current assets to appreciate soon, we may not want to sell them. If we expect them to depreciate or remain at constant value, selling them might be a good idea.

We'd also want to think about what those assets are being used for; in a manufacturing company, those assets might be factories that are being used to produce things, and could actually have real value to us far in excess of their market value. In that case, we should not sell them. On the other hand, if they are not producing anything, they may not be worth any more to us than we could get from selling them.