CSR format compresses sparse matrices by storing only non-zero values, their column positions, and row start pointers. The example matrix [[0,0,1],[2,0,0],[0,3,0]] has non-zero values [1,2,3]. Their column indices are [2,0,1] respectively. The indptr array [0,1,2,3] marks where each row's data starts in the data array. This structure saves memory and speeds up matrix operations. The execution table shows step-by-step how these arrays build up. Key points include understanding that indices follow the order of non-zero elements row-wise and indptr length is number of rows plus one. Quizzes test understanding of these arrays and their changes.