Capital Structure on Firm Profitability: perspectives from non-financial listed Firms in Egypt

The primary goal of this study is to determine how capital structure (debt-equity) and profitability are related.The Financial information was gathered between 2003 and 2020.This research study investigates the intricate relationship between a firm's debt ratio and its profitability, aiming to shed light on the complex dynamics that exist within the financial structure of businesses.The debt ratio, often represented as the proportion of a company's debt to its total assets, is a crucial determinant of financial risk and leverage, and the variable of Profitability, on the other hand, is a fundamental measure of a firm's ability to generate earnings relative to its investments and operational costs as firm size The capital structure of a company is strongly influenced by its size, Larger companies have more access to different sources of money, whereas smaller companies may depend entirely on equity funding and other factor like industry type and other factors and Profitability variables serve as key performance indicators, reflecting the efficacy of a firm's operational and financial strategies.This section discusses return on equity (ROE) as popular metric for profitability.Through a comprehensive analysis, it underscores the importance of these variables in assessing financial health and driving value creation.And The Achieving an optimal capital structure entails balancing risk and return considerations while aligning with organizational objectives.This section delineates the factors influencing capital structure decisions, ranging from market conditions and regulatory constraints to firmspecific characteristics.By exploring models and methodologies for optimization, it equips practitioners with tools for effective financial management and value creation.