The main objective of this study was to empirically examine firm specific and macroeconomic determinants of financial distress in Amhara manufacturing share companies. In order to achieve the objectives, secondary data were collected from ten manufacturing share companies for a sample period covering from 2010 to 2019 and analyzed using random effect (RE) regression model. The endogenous variable used in the study was financial distress which is measured by debt service coverage ratio while the exogenous variables employed in the study were leverage, liquidity, profitability, solvency, firm size, inflation and economic growth. A quantitative research approach and explanatory design were adopted in carrying out this research. The results from the panel random effect regression output revealed that except GDP which had a positive but insignificant effect on the debt service coverage ratio other variables like liquidity, profitability, solvability, asset size and inflation have a positive and statistically significant effect on the debt service coverage ratio. On the other hand, leverage has a negative and statistically significant effect on firms debt service coverage ratio. In general, the research concludes that both firm specific and macroeconomic factors determine the level of financial distress in Amhara manufacturing share companies. In the end the study forwards that firm policies that improve firm’s profitability, liquidity and solvency and strategies that reduce firms leverage will help to lower the financial distress level of companies.