Abstract: This study looks into the relationship between capital structure and the organizational profit of organizations listed on the Saudi stock market. A cross-sectional regression analysis was conducted to achieve the research objectives. OLS, fixed-effect, and random-effect models, as well as the Hausman test, are used to analyze the data for 121 non-financial firms between 2009 and 2020. The Stata program analyzes the hypotheses by giving a sample of 1573. The sample companies are from various industries, resulting in more diverse outcomes. The dependent variables are the return on equity and the return on assets.

In contrast, independent variables are (SDA), (LDA), (TDA), and the control variables are the size and (SG). The results indicate that only short-term debt (STD) has a significant negative relationship with a firm’s accomplishment, measured by ROE, consistent with Hamid et al. (2015). For ROA, total debt (TDA) has a significant negative relationship with ROA. This indicates that capital structure combining long and short debt affects ROA negatively. Finally, the results reveal that both firms’ performance is significantly related to the control variable (firm size), and SG sales growth has no significant relation. For the benefit of scholars and decision-makers, the author offers a recommendation. The implementation of an improved system could lead to enhanced organizational performance and increased revenue.

Keywords – Capital structure, Firms, performance, Saudi Arabia, finance, decision.