This study is the first to estimate liquidity risk by using exposure based cash flow at risk. The study considers only the manufacturing sector firms listed in Karachi Stock Exchange. Results shows some companies facing high liquidity risk, some facing slight liquidity risk and only a very few facing almost no liquidity problems. Results also indicate that there is no discrimination of sector in facing liquidity problems that is no particular industry that is facing liquidity problem. In each industry, some firms are illiquid while others are not. Supervisor:-Dr. Abdul Rashid