This empirical study analyzes the impact of cash conversion cycle on firms’ profitability and liquidity in Pakistan for the time period 2000 to 2014. For the purpose of this study, panel data of 387 non financial firms listed on Pakistan Stock Exchange is used. Panel data methodology is used for the analysis of the data. The results indicate that cash conversion cycle is significantly related to the profitability and liquidity levels of the firms. The findings further reveal that sales growth, firm size and also have significant effects on the firms’ profitability and liquidity. The study also highlights the significance of cash conversion cycle as a proactive tool in the hands of management of firms. Moreover, firms are required to improve their cash collection and payment policy in order to enhance their profitability and liquidity positions. Supervisor:- Dr. Abdul Rashid