Binary number = 10110101

To convert it to octal, you can first convert to decimal and then to octal (base 8)

Or since 8 = 2^3, every 3 bits (starting from the leftmost) will give the 
equivalent Octal bit.

If we break up the given binary number into 3-bit chunks, we get
(I've used the "|" character as a separator)

10|110|101 which translates to octal of 265.
(Binary 10 = 2
110 = 6
101 = 5)

So Binary 10110101 = Octal 265.

Hope you got it :)