Please have a look at these tutorials: Calibration and Terrain correction for S1 is explained there:
http://step.esa.int/main/doc/tutorials/sentinel-1-toolbox-tutorials/
Please also have a look at this topic: Radiometric & Geometric Correction Workflow
I have moved the last posts in here topic because they did not really fit in where they were placed before. Please don’t cross-post your question over various topics.