Capital structure is a crucial financial decision that determines the proportion of debt and equity used to finance a company’s operations. An optimal capital structure helps in maximizing profitability and minimizing the cost of capital. This study examines the relationship between capital structure and company profitability using theoretical insights and financial analysis. The research focuses on how debt financing, equity financing, and financial leverage influence profitability indicators such as Return on Equity (ROE) and Return on Assets (ROA). The findings indicate that a balanced capital structure enhances financial performance, whereas excessive debt increases financial risk and reduces profitability.