The fundamental aspect of this paper was to discuss how working capital management affects major firm's performance variables. The firm's performance in the context of this study was justified as profitability, cash conversion cycle, company size, current ratio, current assets to total assets, current liability to total assets, and debt ratio.
The scope of this study consisted of 22 Sabah's listed firms for the period from 2000 to 2012. This study was based on a pooled regression approach while Pearson's correlation was used to test the hypothesis. The empirical results showed that cash conversion cycle (CCC) was significantly related to profitability; however, CATAR, CLTAR, and CR did not show any significant relation with profitability. The results also confirmed that SIZE and LVRG were the important roles in profitability. Both variables were highly significant at 1%. In addition, the finding showed mixed results between working capital management and profitability. CATAR, CLTAR, and CCC showed negative relation with profitability while CR was at the opposite direction. Thus, a proper design of working capital management policy will ensure the firm's ability to operate effectively and efficiently at the optimum level as well as to enhance the firms' values