There are three main items that affect the ability of your computer: the processor speed, the amount of memory, the size of the hard disk (or disks). The descriptions below are a rough guide to what these three things do.
Processor: the speed of the processor indicates how fast anything can be done (a bit like brain ability)
Memory: the amount of memory controls how many different things can be done at the same time (a bit like multi-tasking)
Disk space: the size of your disk(s) limits the size of any files can be stored (a bit like how much space is in your cupboards)
This is only a rough guide but it gives some pointers to the overall ability of a particular computer compared to another similar one.