Contribution margin means(sales-variable expense).And CM ratio means what percentage of Contribution margin over sales.It indicates the capacity to bear the fixed expense because we get net operating income by deduction of fixed expense from Contribution margin.If Contribution margin more over sales then net operating income will be more or if CM ratio more over sales then deducting fixed expense we will get net operating income.That's why Contribution margin ratio is used as a measure to calculate net operating income.