Profitability is one of the business goals that need to be achieved
to ensure sustainability, as well as a chance to expand. Capital
structure is the subject of an interesting discussion in determining
profitability. This study aims at examining the influence of capital
structure on profitability in sharia banks in Indonesia in which the
management of sharia banks is different from conventional banks.
A capital structure used in this study comprises the Debt-to-Equity
Ratio (DER) and Debt-to-Asset Ratio (DAR), while profitability
comprises Return-on-Equity (ROE) and Return-on-Asset (ROA) in
sharia banks in Indonesia for five years. The findings revealed that
there was no significant influence between capital structure and
profitability in sharia banks in Indonesia, both measured using
DER, DAR on ROE, and ROA. This study implies that the findings
are different from previous studies, but the results of the
correlation coefficient show a negative direction. In other words,
the higher the use of debt, the lower the profitability. The use of
debt that is too high can reduce the level of profitability, and not
produce assets at the optimal point. Therefore, the composition of
debt in sharia banks needs special attention to increase the
expected profit