If you win, it goes up. If you loose, it goes down.
Ranking/Rating???
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You play good, win many games, have high rating. You play bad, lose many games, have low rating. Play few games, rating not so accurate. Play many games, rating more accurate. Should the preceding explanation prove unsatisfying, you could always look up "Glicko RD" in the archived forums for something more detailed.
The most important thing that hasn't been noted yet: The amount your rating changes after a game (up for a win, down for a loss) depends on your opponents rating compared to your own. Losing to a GM doesn't cost you as much points as losing to a 1200 rated player for example. You also lose points for drawing weaker players and vice versa.
Can someone please explain 'Ranking/Rating' to me in as simple terms possible?
Many thanks in advance!