What is CPU time and How does it is calculated by Salesforce?

CPU Time in Salesforce:-

CPU time is calculated for all executions on the Salesforce application servers occurring in one Apex transaction—for the executing Apex code, and any processes that are called from this code, such as package code and workflows. CPU time is private for a transaction and is isolated from other transactions. Operations that don’t consume application server CPU time aren’t counted toward CPU time. For example, the portion of execution time spent in the database for DML, SOQL, and SOSL isn’t counted, nor is waiting time for Apex callouts.