A toy manufacturer following the self-liquidating debt.principle will generally finance seasonal inventory build-up prior to the Christmas season with:

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The self-liquidating debt principle is a financing strategy where short-term debt is used to finance assets that will be sold or converted into cash before the debt matures. This is a common strategy in seasonal businesses where inventory build-up occurs prior to the peak sales season. Trade credit, or credit from suppliers or vendors, is a common source of short-term debt used to finance seasonal inventory build-up. Selling equipment or issuing stock, such as common or preferred stock, would not be as effective or efficient in generating short-term cash flow to finance inventory build-up.

A Toy Manufacturer Following the Self-Liquidating Debt