Financial market inefficiencies do not affect all firms homogenously. Financially constrained firms have limited or no access to financial markets and rely more heavily on internal resources to finance their operations. We show that financially constrained firms hold relatively higher inventory and have lower inventory turnover. Using two distinct approaches, we suggest the link is causal. We first investigate the effect of the 2008 financial crisis on the inventory performance of financially constrained versus unconstrained firms. We apply a difference-in-difference methodology to a sample of public U.S. manufacturing firms from 2005 to 2017. We divide the sample into a control group (financially unconstrained firms) and a treatment group (financially constrained firms) using three widely-applied measures of financial constraints: size, Whited-Wu index, and Hadlock-Pierce index. We compare the inventory level, inventory turnover, and adjusted inventory turnover of constrained versus unconstrained firms before and after the crisis.