As a precursor to the single precision binary floating point representation of a number in a computer, I start with discussing what is known as "scientific notation" for a decimal number.
Using a base 10 number system, every positive decimal number has a first non-zero leading digit in the set {1..9}. (All other digits are in the set {0..9}.) The number's decimal point may always be shifted to the immediate right of this leading digit by multiplying by an appropriate power 10^n of the number base 10. E.g. 0.012345 = 1.2345*10^n where n = -2. This means that the decimal representation of every non-zero number x can be made to take the form
x = (+/-)(i.jklm...)*10^n ; where i is in the set {1,2,3,4,5,6,7,8,9}.
The leading decimal factor (i.jklm...), known as the "mantissa" of x, is a number in the interval [1,10), i.e. greater than or equal to 1 and less than 10. The largest the mantissa can be is 9.9999... so that the real "size" of the number x is an integer stored in the exponential factor 10^n. If the number x is very large, n >> 0, while if x is very small n << 0.
We now want to revisit these ideas using the base 2 number system associated with computer storage of numbers. Computers represent a number internally using the base 2 rather than the more familiar base 10. All the digits used in a "binary" representation of a number belong to the set {0,1}. Using the same kind of thinking to represent x in a binary representation as we did in its decimal representation, we see that every positive number x has the form
x = (+/-)(i.jklm...)*2^n ; where i = 1,
while the remaining digits belong to {0,1}.
Here the leading binary factor (mantissa) i.jklm... lies in the interval [1,2), rather than the interval [1,10) associated with the mantissa in the decimal system. Here the mantissa is bounded by the binary number 1.1111..., which is always less than 2 since in practice there will never be an infinite number of digits. As before, the real "size" of the number x is stored in the integer exponential factor 2^n. When x is very large then n >> 0 and when x is very small n << 0. The exponent n is expressed in the binary decimal system. Therefore every digit in the binary floating point representation of x is either a 0 or a 1. Each such digit is one of the "bits" used in the computer's memory for storing x.
The standard convention for a (single precision) binary representation of x is accomplished by storing exactly 32 bits (0's or 1's) in computer memory. The first bit is used to signify the arithmetic "sign" of the number. This leaves 31 bits to be distributed between the mantissa (i.jklm...) of x and the exponential factor 2^n. (Recall i = 1 in i.jklmn... so none of the 31 bits is required for its representation.) At this point an important "trade off" comes into play:
The more bits that are dedicated to the mantissa (i.jkl...) of x, the fewer that are available to represent the exponent n in its exponential factor 2^n. Conventionally 23 bits are dedicated to the mantissa of x. (It is not hard to show that this allows approximately 7 digits of accuracy for x when regarded in the decimal system, which is adequate for most scientific work.) With the very first bit dedicated to storing the sign of x, this leaves 8 bits that can be used to represent n in the factor 2^n. Since we want to allow for very large x and very small x, the decision has been made to store 2^n in the form
2^n = 2^(m-127) ; n = m - 127,
where the exponent m is stored rather than n. Utilizing 8 bits, this means m belongs to the set of binary integers {000000,00000001,....11111111}. Since it is easier for humans to think in the decimal system, this means that m belongs to the set of values {0,1,....255}. Subtracting -127, this means in turn that 2^n belongs to the number set {-127,-126,...0,1,2...128}, i.e.
-127 <= n <= 128.
The largest the exponential factor 2^n of our binary floating point representation of x can be is then seen to be 2^n = 2^128, or viewed in the decimal system (use any calculator to evaluate 2^128)
2^n <= 3.4028...*10^38.
Summarizing, the largest number x that can possibly be stored in single precision floating point in a computer under the IEEE format is a number in the form
x = y*(3.4028...*10^38).
Here the mantissa y lies in the (half-closed, half-open) interval [1,2).
For simplicity's sake, Matlab reports the "size" of the "largest" possible floating point number as the largest size of the exponential factor 2^128 = 3.4028*10^38. From this discussion we see that the largest floating point number that can be stored using a 32 bit binary floating point representation is actually doubled to max_x = 6.8056*10^38.