Magento Compilation

It allows us to compile all files of magento installation in order to create a single include path to improve the performance

Before compiling the code make sure that “includes” and the file “includes/config.php” must both be writeable.

You can compile the code from the admin panel  System → Tools → Compilation

NoTE: Before you make any changes to your Magento installation you should always disable compilation. Once the changes are made, run the compilation process, and then enable it.