Abstract:
The main purpose of this study was to determine the relationship between strategic conformity and financial distress among listed firms in Kenya. The study employed panel analysis for a period covering ten years from 2006-2015 for all 64 listed firms in Nairobi Securities Exchange. Findings from random effects multiple regression analysis showed that inventory levels has a positive and significant effect on financial distress (β =0.678; p<0.05) while plant and equipment newness had a negative and significant effect (β=-0.580; p<0.05) on financial distress. This study recommends that firms should ensure that they have policies that regulate inventory levels as this has a positive significant effect on financial distress, while adequate project appraisal should be done to inform acquisition of new plant and equipment.
