AFQT scores are the primary measure of recruit potential. Figure 2.7 indicates the percentage of NPS recruits who scored at or above the 50th percentile (Categories I–IIIA) since FY 1973. Numerical data are in Appendix D, Table D-12. The drop in Category I–IIIA recruits after FY 1976 was due primarily to the miscalibration of the ASVAB.  In FY 1976, when new versions of the ASVAB were introduced, an error in calibrating the score scales made the new versions "easier" than the old versions (i.e., applicants received test scores higher than their actual ability). In FY 1980, an independent study of the calibration was made and the test was correctly calibrated. Then, Congress added legal provisions stipulating that no more than 20 percent of accessions could be in Category IV and that such accessions had to be high school diploma graduates.  However, as previously stated, Defense Planning Guidance decreases this limit even further, allowing no more than 4 percent of recruits to come from Category IV.
In complete honesty, one can say that the test identifies with an entire life's worth of knowledge. It essentially pulls from 3 different aspects. First, it draws from concrete facts that were acquired from all areas of a person's educational career. Secondly, it draws from a person’s ability to comprehend and use context clues to make assumptions. Lastly, it draws from a person’s physical/verbal skills to see if they can properly administer those more physical aspects. Overall this is why people have identified it as the “SAT on steroids.”
AFQT scores are reported as percentiles between 1-99. An AFQT percentile score indicates the percentage of examinees in a reference group that scored at or below that particular score. For current AFQT scores, the reference group is a sample of 18 to 23 year old youth who took the ASVAB as part of a national study conducted in 1997. Thus, an AFQT score of 95 indicates that the examinee scored as well as or better than 95% of the nationally-representative sample of 18 to 23 year olds. An AFQT score of 60 indicates that the examinee scored as well as or better than 60% of the nationally-representative sample.
One ASVAB sub-measure, the Armed Forces Qualification Test (AFQT)--which is just a separate analysis of the same tests that focuses only on four of the subtests--is also population-referenced, but its score from 1-99 is a percentile score. This means that if you score a 73, you scored as well as or higher than 73% of test-takers in the national sample.