These show sales of $1.3 billion, compared with $1.25 last year, and net income of $201 million, compared with $184 million in 2022.

Cash generation will increase sharply over the year, thanks to a reduction in working capital requirements. In this respect, it is reasonable to assume that the current poor economic climate in the consumer electronics sector will lead to a decline in business.

Indeed, management has announced a cautious forecast for 2024, with flat sales growth. Moreover, Dolby has long ceased to distinguish itself by its capacity for expansion: while sales tripled between 2003 and 2013, excluding inflation, they have stagnated over the last decade.

However, the company's royalty-based, attractive business model - coupled with a world-renowned franchise - results in a gross margin of around 90%.

Over the past decade, however, the cost structure has suffered from pronounced remuneration inflation, particularly via stock option and similar programs. As a result, operating profit fell sharply over the cycle.

Dolby's management has long been questionable. Remuneration in the form of stock options and the like sometimes accounts for between a third and a half of operating profit.

The substantial amounts spent on share buy-backs have served only to compensate for dilution, rather than to remunerate shareholders. They should therefore be seen as an expense rather than an actual return of capital.

We note that CEO Kevin Yeaman is quick to offload the shares he so generously receives, and that the combination of stagnant operating performance and dubious management has not prevented Dolby's valuation from rising throughout the cycle.