3 Risks Zipcar Investors Need to Watch

Warren Buffett once quipped: "some men read Playboy. I read annual reports." Perhaps that's not a surprising thing to hear from one of the greatest investors ever -- after all, those reports provide a comprehensive overview of a business (and, as I assume Buffett did, I mean the 10-K form filed with the SEC, not the glossy, magazine-looking pamphlet companies send out around the same time).

However, About.com writes that the 10-K is "full of the nitty-gritty details that make a lot of people's eyes glaze over, and, unfortunately, there is no way to simplify it."

Today I'd like to drill down on the risks section of the 10-K, wherein companies disclose what they believe could adversely affect their operations, and I'd like to try to simplify it as much as possible.

Following is a very simple visual of some of the things that could keep Motley Fool Rule Breakers favorite Zipcar (NAS: ZIP) from fulfilling its ambitions of expanding into new markets. These risks come directly from Zipcar's 10-K:

Source: Zipcar 2010 10-K.

Think I missed something in this illustration? General thoughts on this exercise? Let me know in the comments section below. And if you haven't already, be sure to follow our Zipcar news and commentary using the Fool's free My Watchlist tool.

At the time thisarticle was published Fool.com graphics/photo/art editor Dari FitzGerald owns shares of Zipcar. The Motley Fool also owns shares of Zipcar.Motley Fool newsletter serviceshave recommended buying shares of Zipcar. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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