It is about so much more than the bouncing balls often used to demonstrate it: it can be used to convey weight, accentuate movement and enhance a character’s flexibility. Squash and Stretch: it isn’t just for cartoony animation, either.
One thing to bear in mind when utilizing Squash and Stretch is the need to maintain a constant volume. When you animate an arm stretching, the thickness of the limb should decrease.
Think of a rubber band: if you pull the ends, the rubber is distributed along a greater distance, so the band thins out. The same is true if you’re squashing an object: the mass has to go somewhere, and it generally bulges outward – keeping the volume, if not the shape, constant.
The most important principle is Squash and Stretch, the purpose of which is to give a sense of weight and flexibility to animating objects.
It can be applied to simple objects, like a bouncing ball, or more complex constructions, like the musculature of a human face. Taken to an extreme point, a figure stretched or squashed to an exaggerated degree can have a comical effect.

In realistic animation, however, the most important aspect of this principle is the fact that an object’s volume does not change when squashed or stretched. If the length of a ball is stretched vertically, its width (in three dimensions, also its depth) needs to contract correspondingly horizontally.
Examine Remy above and to the right. His face and entire body becomes distorted wildly, but still resembles Remy. Also keep in mind this happens very briefly – sometimes only one or two frames – and can be very subtle to achieve the desired effect.
Don’t limit yourself to organic or soft objects. Artists at Disney coined the term “Disneyite” – an object that is realistically rigid, yet flexible when needed. The candelabra Lumiere in Beauty and Beast is great example of this.
From Frank Thomas and Ollie Johnson:
This action gives the illusion of weight and volume to a character as it moves. Also squash and stretch is useful in animating dialogue and doing facial expressions. How extreme the use of squash and stretch is, depends on what is required in animating the scene. Usually it’s broader in a short style of picture and subtler in a feature. It is used in all forms of character animation from a bouncing ball to the body weight of a person walking.
This is the most important element you will be required to master and will be used often.
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