This study investigates financial distress conditions and their associated challenges, opportunities, strategic responses, and financing constraints in manufacturing companies in the South Wollo Districts, Amhara Region, Ethiopia. Descriptive exploratory research design with a quantitative approach was employed, and primary data were collected from 196 managerial respondents across 49 purposively selected manufacturing firms to obtain valid responses. The finding reveals that firms report a low-to-moderate average level of financial distress, accompanied by moderate financial and operational challenges. Despite existing constraints in access to finance and rising input costs, many firms report adopting adaptive strategies such as cost management, technological improvements, and collaboration initiatives. The findings further indicate that financial distress is perceived not only as a constraint but also as a potential catalyst for operational adjustment and strategic repositioning. The findings suggest that strengthening financial management capacity, improving access to finance, and enhancing policy support mechanisms may further reinforce the resilience and sustainability of manufacturing firms operating under financial pressure.
Endris et al. (Thu,) studied this question.