Conversion Factor on Bond future


I am having a difficult time understanding the conversion factor regarding bond futures:


Time until expiration = 1.2 year

Coupon on the underlying bond = 7% annual

Quoted price = $1040

Conversion factor = 1.13

Annual risk free rate = 5%

Accrued interest on bond at maturity of futures contract = $14

I simply do not understand the relationship of the conversion factor to the other variables that are listed above. Specifically, I know you have to multiply calculated price on the futures contract by 1/CF, but what does this exactly mean in relationship to all the other variables described above?