You dip one of the strips in the coolant. The rectangular colored pieces on the strips are foam pads with chemicals on them. Those chemicals react to the coolant and change colors.
You align those pad colors with those on the chart, and that tells you the condition of the coolant.
One pad is for glycol% which gives you your freeze point.
Another pad is for ph level. That determines whether or not the metals will be eating each other in the system.
The final strip is for your additive. It's measured in ppm. You run into trouble with too little and too much. Most of the time it will tell you how much sca(supplemental coolant additive) to add to your current system to get it up to snuff.
Additives are what combats corrosion, cavitation, and foaming in the coolant. There are multiple types off additive packages so you have to get the correct test strip and sca for the coolant you're using.
Google this stuff once and you'll find more info then you'd want to read concerning it.