The study aims to contribute to the previous studies by providing evidence regarding the relationship of working capital management and corporate performance in the financially constrained and unconstrained firms. A sample of 188 manufacturing firms listed on Karachi Stock Exchange Pakistan was selected for the time period of 2006 to 2014. The return on asset was used to measure the corporate performance while the working capital management was measured using the net trading cycle. The control variables used were operating cash flow, debt, fixed asset to total asset ratio, size and growth of firm. The findings of the study show that there exists a negative significant relationship between the net trading cycle and the return on asset. This means that a low level of working capital decrease the corporate performance. The firms were further segregated on the basis of size and debt to group the firms as financially constrained and unconstrained. No significant relationship of a low level and a high level of working capital with the corporate performance is found in the financially constrained firms. Further, the findings of the study show that in the financially constrained firms, the investing policy has a positive significant relationship with the return on asset, and the firms financing policy has a negative significant relationship with the return on asset. It is suggested that the manufacturing firms in Pakistan may efficiently manage their working capital in order to enhance the firm?s value and to attract more investors.