The block coefficient of a ship is the ratio of the underwater volume of ship to the volume of a rectangular block having the same overall length, breadth and depth.
Let us make this more clear.
Let us say a vessel has a draft equal to 'd' meters. The ship's underwater volume will be as highlighted yellow in the below picture.
Now let us say that the extreme dimensions of the ship's hull at this draft are 'L' and 'B'. In other words if we have a box of length 'L', Width 'B' and height 'd', the ship's underwater area at this draft would exactly fit this box.
Now the ship's block coefficient at this draft (Cb) would be
Cb = Displacement of the ship / L x B x d
As all these factors would change with the change in draft, Cb would also change with change of ship's draft.