principal

This term in financial accounting refers to the amount of debt excluding interest. Mortgage loan payments typically require monthly payments of principal and interest.

Principal is the original amount of a loan or debt, excluding interest.

- Used in treasury and financial management for funding, investment, and risk decisions.
- Used to evaluate cash flows, financing costs, and capital structure.

- Example: Finance teams use **principal** when planning funding needs and managing cash and risk.

- Why it matters: Supports liquidity and risk control and improves the quality of financing and investment decisions.