Finance Discussion

Finance Discussion

Finance is a very large field. Unsurprisingly, mainly because the three main parts composing a business venue comprise investing, financing and operating activities. The first two of these unmistakably belong to finance, while the third could more often than not belong to discussion about finance as well, such as in the case of the day-to-day business operations of a hedge fund.

Alternatively, despite the operations of a business, be it a small firm, a medium sized partnership or a large, multinational corporation, marketing, selling and administrative activities, corresponding to the operating activities category, are likewise important.

Students pursuing a business degree, such as a BBA or BComm, often wonder why they must take so many courses in areas which do not interest them at first glance. For instance, a Bachelor of Commerce student majoring in accounting may wonder why he or she has to first complete classes on business communication, introduction to marketing or introductory real estate. But the answer is clear. In addition to preparing business students for the demanding job market and even more challenging business world, lectures such as Business Communication 101 teach students crucial skills such as writing successful CVs, resumes and cover letters.

Managers could benefit from knowing the basics of marketing, even if they don't ever intend to become professional marketers. Illustration: © Megan Jorgensen

Additionally, while real estate may not initially seem as an integral part of finance to a commerce student, buying, selling and maintaining of real estate property, whether commercial or residential has a lot to do with finance. Regardless, realtors or real estate agents tend to specialize in residential versus commercial properties, as dictated by the different markets for these diverse types of assets and transactions, and consequent regulations. In addition, even residential real estate may be commercial when it is used primarily to derive income, as is the case with rental properties.

Some investors also buy properties to transform and rebuild them in a fashion known as "flipping houses", when a deteriorated house or condo is bought in bad condition and then renovated to enhance its quality, and hence increase its market value. However, while the resulting renovated and refurbished property may be worth much more than it was worth when it was initially bought, gains made from the sale of such a property are considered capital gains and are taxed at 50% according to Canadian law. Some exceptions may exist, as for example if the property is a primary residence, but a calculation must be performed to verify if a primary residence qualifies for an exemption. As for all such cases, the services of a professional, chartered and certified accountant may shed light on complex matters. For instance, money invested to renovate a property may be deductible in some cases when certain specific conditions are met.

Finally, to briefly go over the subject of marketing, it is a course taught because most managers could benefit from knowing the basics of marketing, even if they don't ever intend to become professional marketers. Undergraduate students from other faculties than management often think that marketing is advertising. Nonetheless, while marketing entails advertising, it is much more than that, but covering the basics of marketing goes beyond the scope of the present paper.