This paper investigates the relationship between indebtedness and profitability of companies using the examples of Medika d.d. and Dalekovod d.d. By analyzing the financial statements of these companies in the period from 2010 to 2020, it is investigated how the level of indebtedness affects profitability and vice versa. The company Medika d.d., a pharmaceutical distributor, showed stable revenue growth during the analyzed periods. However, at the same time, an increase in the company's indebtedness was recorded, which caused a decrease in profitability. This indicates a potential negative relationship between leverage and profitability, where an increase in leverage may result in a decrease in profitability. On the other hand, the company Dalekovod d.d., specialized in power engineering and infrastructure, faced a turbulent period during the analyzed period. Although the company recorded fluctuations in income, debt ratios were high. This led to increased interest costs and reduced profitability, suggesting a negative relationship between leverage and profitability. The analysis of these examples indicates the importance of balanced indebtedness and profitability in the company's operations. Excessive leverage can result in reduced profitability due to increased interest costs and financial pressure, while excessive profitability can mask long-term financial risks. Therefore, managers and investors should carefully consider this connection when making business decisions and managing the company's financial resources. This analysis shows that there is a complex relationship between leverage and corporate profitability, and that it is important to carefully manage these aspects to ensure long-term sustainability and business success.