Final answer:
Zebra Co., with a debt to equity ratio of 1.7 to 1, has the highest financial risk compared to the other companies as it suggests higher leverage and potential financial distress.
Step-by-step explanation:
Based on the provided debt to equity ratios, Zebra Co. with a ratio of 1.7 to 1 appears to have the highest financial risk compared to Albatross Co. (1.2 to 1) and Badger Co. (0.8 to 1). The debt to equity ratio is a financial leverage indicator that compares a company's total liabilities to its shareholder equity. It's used to evaluate a company's financial health and measure how much of the company is financed by debt versus shareholder investment.
A higher ratio suggests that a company is more leveraged and may have a higher risk of financial distress or bankruptcy, especially if the company faces downturns or financial difficulties.