Compound exercises are movements that involve multiple muscle groups being used at the same time. Using more than one muscle group to perform an exercise has the following benefits:
Improves overall strength quickly as you can lift heavier
Reduces time to fatigue as you aren't relying on one muscle to perform a movement
Increases the efficiency of your strength sessions (if you are limited on time, then you can train more muscles in one go)
Improve coordination and balance
Improve joint mobility and stability
Increases your heart rate which will improve your cardiovascular fitness
Example of compound exercises include your major lifts: squats, deadlifts, lunges, shoulder press, push ups, pull ups, bench press.
Compound exercises are great for improving overall strength but to target a specific muscle group then isolation exercises are recommended.