All it shows is whether the ballast related to the overall displacement of the boat is or is not within the average design envelope-or not. Most sailboats are classified as displacement hulls. It is a function of the length of the wave created by the boat as it moves through the water. Wave speed is a function of wavelength. The longer wavelength is faster.
Longer boats make longer waves.
Since longer waves are faster, boats that make longer waves are faster. In fact, 1.34 is what some call the breakaway point where the stern of the hull drops into the hole made by the stern wave, and the bow tries to climb the bow wave and attempts to surf as a power boat does. In the case of a displacement hull, the shape and strength of the stern sections of the hull largely prevent surfing under normal conditions, however racing boats with strong aft sections often do surf, but the forces applied to the hull are also relatively massive. The next Design Analysis Formula usually encountered is the so-called Prismatic Coefficient. While not particularly important knowledge for the casual reader, the Prismatic Coefficient is the most important formula for the sailboat designer.