Final answer:
The debt to equity ratio signals a greater risk of bankruptcy as it increases. Option a.
Step-by-step explanation:
The ratio that signals a greater risk of bankruptcy as it increases is the debt to equity ratio. The debt to equity ratio measures the proportion of a company's debt to its equity capital and represents the company's reliance on borrowed capital. As the debt to equity ratio increases, it indicates that the company has taken on more debt relative to its equity, which can be a sign of financial distress and an increased risk of bankruptcy.
For example, if a company has a debt to equity ratio of 2:1, it means that the company has twice as much debt as equity. This indicates a higher level of financial risk compared to a company with a lower debt to equity ratio.