This principle is prominently visible in Facial character animation. Our face is made up of so many complex muscles. We stretch and squash our facial muscles to depict certain emotions. So while animating, one can use this study to bring out or exaggerate an expression by using this principle effectively. When a muscle is contracted it will squash and when extended, it stretches.
Even while watching the movies one can notice these stretch and squash which we generally miss out. One should try to pause an animation movie like say Tom and Jerry or any Disney movie for example and look for moments where they have used stretch and squash.
Kindly refer to the Videos for detailed process: