It was Thursday afternoon in late November, and JoAnne Deacon had just returned to her office...

 

Transcribed Image Text:

It was Thursday afternoon in late November, and JoAnne Deacon had just returned to her office at Armistead Insurance Company after a two-week assignment working with one of Armistead's subsidiaries, Data Services, Inc. James Watkins, Armistead's chief financial officer, had called her into his office, had welcomed her to the company, and had asked her to make a business analysis of Data services and help him decide about the future of the subsidiary. In their initial meeting, Watkins had talked about Data Services, and described its current situation as follows: Data Services, Inc., began operations just three years ago, and its sales have grown rapidly since then. This growth has been the result of an aggressive selling effort by the management of the subsidiary. Unfortunately, Data Services has been operating at a loss since its formation This Subsidiary has become a very controversial subject in the company, and I find that I am caught in the middle. The corporate officers are complaining about the increasing cash investment in a subsidiary that continues to lose money. On the other hand, the management of Data Services is enthusiastic and optimistic about the company's future and wants additional funds for continued growth. There are two questions that I would like to have answered concerning the company. Is it a good business for Armistead to invest in? If it is, is it being well managed? It was Thursday afternoon in late November, and JoAnne Deacon had just returned to her office at Armistead Insurance Company after a two-week assignment working with one of Armistead's subsidiaries, Data Services, Inc. James Watkins, Armistead's chief financial officer, had called her into his office, had welcomed her to the company, and had asked her to make a business analysis of Data services and help him decide about the future of the subsidiary. In their initial meeting, Watkins had talked about Data Services, and described its current situation as follows: Data Services, Inc., began operations just three years ago, and its sales have grown rapidly since then. This growth has been the result of an aggressive selling effort by the management of the subsidiary. Unfortunately, Data Services has been operating at a loss since its formation This Subsidiary has become a very controversial subject in the company, and I find that I am caught in the middle. The corporate officers are complaining about the increasing cash investment in a subsidiary that continues to lose money. On the other hand, the management of Data Services is enthusiastic and optimistic about the company's future and wants additional funds for continued growth. There are two questions that I would like to have answered concerning the company. Is it a good business for Armistead to invest in? If it is, is it being well managed?

Answer rating: 100% (QA)

Background Armistead Insurance company was a large company by industry standards It had experienced ... View the full answer