Background: Capital structure decisions remain a cornerstone of corporate finance, particularly in emerging markets characterized by institutional voids and higher macroeconomic volatility. Manufacturing firms in these economies face unique constraints regarding debt and equity financing.

Objective: This study investigates the determinants of capital structure, specifically analyzing the impact of firm size, profitability, tangibility, and growth opportunities on leverage ratios.

Method: This study uses a simulated dataset created for academic training purposes. A quantitative panel data research design was conceptualized using simulated financial data of 120 manufacturing firms over a five-year period (2018–2022). Fixed-effects panel regression models were utilized.

Key Results: Profitability exhibited a significant negative relationship with total debt ratio (β = -0.45, p < 0.001), strongly supporting the Pecking Order Theory. Firm size and asset tangibility showed significant positive associations with leverage, aligning with the Trade-off Theory.