It's based on the glide ratio you set up for your aircraft. Otherwise, when you're flying straight-and-level or climbing, your glide ring would be infinite.
So, interpret the glide ring as "this is where you should be able to reach if your plane really has the glide ratio you input, AND you control it in a way to achieve that performance". It's what you *should* be capable of achieving. There is also a small margin built in, so there's a small chance you could do slightly better than what the ring shows if you fly everything perfectly.
iFly does also try to factor in winds, so you might see the ring bulge to one side or the other. But those are forecast/predicted winds, so YMMV.