The vertical signal gives you the amplitude of the reflector. The horizontal baseline gives you the time or distance to the reflector.

Like NTD III stated, the vertical will show how much of a reflection comes back to the transducer in amplitude and this signal would then be compared to the reference line (once that is established off of your calibration block) to help you evaluate the flaw if you are working to the dB rating system in D1.1 Table 6.2. The horizontal shows the time of flight for the sound path to the reflector and back....all of the trig will be worked off of this figure to find the depth in the material and distance across the scanning surface to locate the reflector.