What do the red, grey, and green bars on item status mean?

[Crovalicious]

I'm guessing this is extremely obvious to everyone but me. I know the bar is the items condition, but I can't figure out what each color means.

[Khan Boyzitbig of Mercia]

The green bar is how much damage the item can take and still be functional, grey is how much damage/wear it has taken and red bar is how much damage the thing can take after it becomes non-functional but still not completely destroyed.

[Crovalicious]

Thank you!