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In this episode of Two Minute Tuesdays, Jess Meldrum from Qmetrix discusses conditional formatting in web reports, using a revenue report as an example. The report employs a traffic light system to highlight accounts that fall short of or exceed budget expectations. The report includes actual and budget figures, a variance column, a variance percentage column, and a flag column. The traffic lights are generated through a custom calculation based on the variance percentage. Three conditional rules are applied within the element properties: values less than -0.5 trigger a red traffic light icon. The tutorial showcases how these conditions enhance report visibility and usability.