If I use Erase all content and settings it will set my phone to new right?

I have an iPhone 4s
OS 6.1.3
I want to make sure everything is deleted, data apps etc and I want to start new again, RESTORE to new
If I go to
Settings>General>Reset> Erase all Content and Settings
that will take my phone to a new state right?  I want it to be completely new and to start over
Also I read about people restoring the phone, But is Restore different than taking it back to out of the box status?

I Thought erase all content and settings is the only way to restore the phone to new.
SOunds like you are saying there are two ways to restore to new?
what is the second way?

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