Binary-Coded Decimal (BCD) is a method of representing decimal numbers in a binary format. In BCD, each digit of a decimal number is encoded separately using its binary equivalent. For example, the decimal number 45 is represented in BCD as 0100 0101, where 0100 represents the digit 4 and 0101 represents the digit 5. This encoding system is useful in digital systems, such as calculators and digital clocks, where precise decimal representation is needed. BCD simplifies the conversion between binary and decimal, making it easier for electronic devices to perform arithmetic operations involving decimal numbers.