Code coverage means how much code have been tested by your test execution. Essentially it helps you identify those code blocks which have never been executed or have not been completely covered. This might help you find out certain condition in the if block which have never been tested which implies, that part of code had never been executed. You can find more details here: http://www.testinggeek.com/whitebox.asp
Code coverage is a measure used to describe the degree to which the source code of a program is tested by a particular test suite. A program with high code coverage has been more thoroughly tested and has a lower chance of containing software bugs than a program with low code coverage. Many different metrics can be used to calculate code coverage; some of the most basic are the percent of program subroutines and the percent of program statements called during execution of the test suite.
There are different types of code coverage is used.