Kaplan and Zingales (QJE, 1997) study the unconditional sensitivity of investment to cash flow in a static demand for capital framework. We study the sensitivity of investment to cash flow conditional on measures of q in an adjustment costs framework, which is more closely related to the empirical literature on investment and financing constraints. We present a benchmark model in which this conditional investment-cash floow sensitivity increases monotonically with the cost premium for external finance, for firms in a financially constrained regime. Using simulated data, we show that this pattern is found in the standard linear specification that relates investment rates to measures of both cash flow and average q.