A debt to equity ratio greater than 100% indicates what about a business?

A debt to equity ratio greater than 100% signifies that a business has more debt than equity, indicating a reliance on borrowed funds to finance its operations. This situation often suggests that the company is using external financing to a significant extent, putting it at a higher risk of bankruptcy. When a business has a considerable amount of debt, it is obligated to make interest payments regardless of its cash flow situation. If the business experiences a downturn or insufficient revenue generation, its ability to meet these obligations can be severely impacted, increasing the likelihood of financial distress or bankruptcy.

The other options do not align with this interpretation. For example, a low-risk designation in the context of bankruptcy would typically be associated with a lower debt to equity ratio, while high levels of internal debt would imply a strong reliance on the company's resources rather than external borrowing, which contradicts the notion of high external debt. Financial security and strong cash flows would also be characterized by a lower debt to equity ratio or balanced financing without excessive reliance on debt. Thus, the implications of a debt to equity ratio exceeding 100% clearly point towards a heightened risk scenario for the business in question.