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A file format refers to the way data are arranged logically within a file. File formatting allows a program to retrieve data, correctly interpret the information and continue with processing.
A file format includes the data encoding process, which ideally minimizes the required storage space. For example, picture and video encoding contain embedded processes like compression, where a picture is divided into pixels. A correlation is then derived to express pixel relationships. In this case, the difference between neighboring pixels is minimal, resulting in the addition of few differential data.
A file format may also contain presentation information. For example, a Microsoft .docx file contains both the document’s text and its final form, including color, position, spacing, font, font size and other information, which must be arranged in a standard form inside the file.