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.

- 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.