What is and how do I use the Parallel axis theorem

[JJRKnights]

I have in my problem, a ball sitting on a cylindrical rod that pivots at the bottom,
some guy in the explanation said parallel axis theorem and came up with moment of inertia of:
I = (mL^2)/3 + [2Mr^2/5 + M(L+r)^2]

where L is the length of the rod, m is the mass of the rod, M is the mass of the ball, r is the radius of the ball.

 

[JHamm]

I assume you've covered moments of inertia, the parallel axis theorem then states that if you're rotating your object about an axis parallel to a second axis where you know the rotation moment of inertia then the new moment of inertia about your displaced axis is equal to the "normal" moment plus a term $md^2$ where m is the mass of the object and d is the distance between the axes (?) .