Baker's Math Question

I have a question about baker's math and pre-fermented flour.  When a recipe calls for "25% fermented flour," what does this mean in terms of baker's math?  In other words, how do you compute a formula using that information? 

I think I know, but I'm not really sure.  I would assume that if you're starting with, say 1000g of flour, then 250 grams of that is fermented using the water from the total water content of the recipe, according to what percentage of hydration you want the pre-ferment to be (125g for a stiff starter, etc.)  Is this correct?