<![CDATA[Asset-heavy and capital-intensive firms require substantial financing for long-term investment, making capital structure decisions particularly important. This study explores the link between operating leverage, profitability, liquidity, and inflation on capital structure. Using balanced panel data from 65 firms across five capital-intensive sectors listed on the Indonesia Stock Exchange, the study analyzes 390 firm-year observations over six years. The Random Effect Model was selected based on the Chow, Hausman, and Breusch-Pagan Lagrange Multiplier tests. The analysis indicates that profitability and liquidity are both inversely associated with capital structure, and these associations are statistically significant, whereas degree of operating leverage and inflation have no significant effects. These findings indicate that profitability and liquidity have a stronger influence in explaining leverage and should receive greater consideration in capital structure policies.]]>
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