That's just one of the mil formulas. You can also do it like this.. If a target is 1 meter tall, multiply that by 1000, then divide by the mils.
The 27.7 is for inches to yards, it's not as accurate as the 1000 formula, but its easier for me and it's almost as accurate.. Like within 2 yards accurate
So 1 meter times 1000= 1000 say the target is 4 mils high and you divide that you get 250m
If something is 70in tall, multiply 70x27.7=1939 then divided by say 3 mils=646 yards
There's a few different ways to do it, but the inches to yards is what's easiest for me.