Capital Structure refers to the combination of debt and equity utilized in a business. There are different advantages and disadvantages of using both sources of finance, but basically,this combination is determined by different variables most important are size, profitability. Non Debt Tax Shield, tangibility,earning volatility and growth of an organization. This work is based on the data from Karachi Stock Exchange. Tangibility variable was found to be highly significant, which favors the Trade off theory. Size variable does not favor the Trade Off Theory. Profitability fails to confirm Pecking order Theory and Trade Off Theory. Growth variable does not confirm to the Agency Cost Theory and Earning volatility does not support Bankruptcy Cost Theory and Agency Cost Theory.