[DELTA]CASH = [[Sales.sub.prior year] (1 + growth rate in sales)] times [(operating profit margin (1 - [tau]) - incremental net operating working capital intensity - incremental fixed capital intensity incremental - cash inflow to investors from financing per dollar of sales].
In the second step, using equations (3) and (10), we calculate the values for the net operating working capital as defined in the statement of cash flow ([DELTA][NOWC.sub.SCF]), and in the expression for the free cash flow measure ([DELTA][NOWC.sub.FCF]) for the years 2012 to 2014.
--The incremental net operating working capital intensities are 26.2%, 23.6% and 30.7% in 2012, 2013 and 2014 respectively, which are higher than the industry average of 16.5%.
The dependent variable across all models is the WCR, which focuses the study on the drivers of net operating working capital behavior and accounts for the joint effect of receivables, inventory, and payables.
Table VI presents fixed effects regression results for the determinants of net operating working capital behavior analysis.