摘要：The discourse objective of this research was to determine the impact of free cash flows on the profitability of firms listed at the Karachi Stock Exchange (KSE). The population consisted of 580 companies listed in KSE as on March 7 , 2015. A stratified sampling method was used to pick a sample of 30 companies listed at KSE. Data were collected from financial statements and published accounts. The amount of free cash flows that was available per year was used. Secondary data were extracted from audited annual reports and financial statements of firms sourced from KSE for a period of five years (2010 – 2014). Data were sorted, cleaned and coded, and then entered into statistical package for social science (SPSS). Data was of quantitative nature. So, data analysis was done by using correlation and regression model. The results revealed that free cash flow and size of firm influence firms’ profitability while capital liquidity does not influence much on dependent variable profitability. This research will be useful since it will add more knowledge on the influence of excess cash on profitability of those firms which are listed at the KSE. Foreign and local investors would be able to get deep insights on the effect of free cash flow on investment while considering investment decisions and diversification for portfolios to increase profitability.
