Abstract
Working capital management greatly influences the corporate cash holdings and liquidity of firms. This study analyzed the impact of working capital management on corporate cash holdings  and also made comparison between small and large scale firms. The sample of 148 non-financial Pakistani firms listed on KSE is extracted for the period of 2004-2013. In balance panel  methodology, the results of whole data set showed that both of the working capital related variables, the cash Conversion Cycle and Working Capital net of Cash are the strong predictor of firm  Cash Holdings. The separate analysis of small and large scales firms showed that the Working Capital Net of Cash is the only working capital related predictor of Cash Holdings in both type of  subsamples. So, Small and large scale Pakistani firms need to keep high cash substitutes in order to remain in an appropriate liquidity position.
Keywords: Working Capital Management, Cash Holdings, Firm Age, Financial Leverage, Size of Firm, Growth of Firm, Cash Flow Ratio, Non-Financial Sector, Fixed Effect Model.