Hi, thanks for pointing us to this interesting new chip.
From glancing through the datasheet, it seems that the calculations you need are explained in detail in 8.2.2.4. First you calculate the noise current with the chosen sample rate, photodiode capacitance and ambient current (see chapter before to calculate ambient current). This noise current defines your maximum range and resolution (at max range this is the minimum current you will still receive from the photo diode).
Below are the formulas to calculate the required optical power from the light source (led or laser). Once this is calculated, you can then calculate the minimum detectable distance below (when the device saturates because of too much light).