Mechanical energy is defined as the sum of kinetic energy and potential energy.
Kinetic energy is the energy possessed by a body by virtue of its motion
Potential energy is the energy stored in an object due to its position above the earth's surface.
One of the best examples of mechanical energy is when a ball is dropped from a certain height, in this process potential energy of the ball (due to its height) is converted into kinetic energy ( due to its motion).