The study examined the relationship between risk management and financial performance of secondhand car trading companies in Kampala. The study applied a cross-sectional research design and a quantitative research approach. The study selected a sample of 242 secondhand car trading companies from 628 by simple random sampling. A structured questionnaire was used to obtain data from either an accountant or business owner. Validity of the instrument was by expert judgment while reliability, Cronbach alpha coefficient. Data analysis was carried out using SPSS (v20) to extract frequency tables, descriptive and inferential statistics for presentation and interpretation. The study found a positive relationship between risk management and financial performance; and positive relationship between working capital management and risk management. Regressed results obtained that jointly working capital management and risk management are significant predictors of financial performance. Risk management was found as the better predictor. The study further obtained a significant partial mediation of risk management in the relationship between working capital management and financial performance. The study concluded that risk management and working capital management are among the key factors that affect financial performance among secondhand car trading companies. The study also observed secondhand car trading companies would financially perform much better if concentration is directed towards risk management. Accordingly, the study recommends; risk assessment, risk mitigation, risk monitoring and control.