What do we mean by contribution margin? How is it calculated? Why do you think it's important to have high contribution margin?

 What do we mean by contribution margin?  How is it calculated?  Why do you think it's important to have high contribution margin? 

 What is the difference between a pro forma income statement, and an actual income statement?  Do good pro forma income statements always equal the actual income statement?  Why or why not? 

Please answer the questions.