In the last years, inventory management has become an integral part of all companies. Inventory management involves a trade-off decision between the advantages and the disadvantages of holding stock. Our research aims to investigate the relationship between firm level inventories and financial performance during the crisis periods, using SMEs' data for the region of Epirus in Greece. The study covers ten years period, which we split into two periods, before and post to 2008, considering 2008 as the beginning period of the recession in Greece and the first year of serious financial constraints for Greek firms. The study empirically examines differences in inventory ratios, both total inventory and its discrete components (finished goods, work in process and raw materials) between main sectors of economic activity in the region of Epirus, and the relationship between inventory management and firm performance on a sample of financial data of 612 enterprises. The results of the correlation and the regression analysis show negative relations between inventories and profitability. This indicates that the policy of minimization of inventories' level may improve firms' profitability. The significance of this study stems from the fact that it sheds light for the desirable firms' policy during the period of financial constraints.