Computers transform data into information. Data is raw, for example, a bunch of numbers such as 132.78, 12.17, 121.10, 34.2 etc don't make much sense by themselves. Information, on the other hand, is the processed data.
If we were told that the above numbers were students' weights, it makes more sense.
Computers can generate information in many ways: modeling real world objects; connecting data items or objects; performing mathematical calculations; applying logic.
For example, a computer can model students in a class by storing their names in the memory. Say: Joe, Linda, John, Sally, and Tom. Computer can also store their exam scores, say: 20, 25, 18, 19 and 12. Now, computers can connect these information. For example Joe to his score 20, Linda to her score 25 and so on. This model is probably sufficient for this particular application.
All real world details are not modeled. What information needs to be included depends on the application. For instance, a health information system may include height and weight, whereas a credit card processing application has little to do with these numbers.
Computers can also perform mathematical operations. One example would be calculating the average exam scores. This way, the professor would be able to know how students, in general, performed in the exam.
Computer can use logic for information processing. For example, if the instructor wants to know how many students recieved above 90%, a counter may be incremented based on logic: (score > 90%).
In closing, a computer reads in raw data, processes the data to generate information, and presents the information to the user or store the information for future use.