Cool Games Corporation derives all of its revenues through the sales of video games. Last year, it fell just short of making a profit although it had strong revenues of $200 million worldwide, half from children and half from adults. This year, the company`s sales to children rose 20% to $120 million, but its sales to adults dropped 40% to a disappointing $60 million. One of the most renowned Wall Street analysts had forecasted that Cool Games Corporation would need to at least match its revenues of last year in order to have a chance to make a profit on video games this year. Upon hearing the news of the Cool Games Corporation`s revenue, the analyst concluded that it was not possible for the company to have made a profit this year.
The analyst`s conclusion is based on which of the following assumptions?