Well, is there any other way? CEOs and everybody else take the market and the conditions THEY think will happen with it in the future, and calculate their resulting interactions and their financial consequences.
After all, financial projections are only the assumptions on the future calculated as consequent financial performance. Market goes down, sales go down, variable costs go down, fixed costs remain and profitability suffers. Little you can do except lower fixed costs, always difficult, or increase sales. No science here.

There is no honest way to calculate the future’s financial situation of a company without starting with the state of the market. Even governments do it, the budget starts with an assumption on tax revenue and a deficit goal, then which expenses will happen and which will not. Tax revenue are market conditions.

Rock on Sergio!

I want a Dodge branded Fiat 500.

On the other hand, that particular performance standard (short term profit maintenance) can be rightly critcized as an incentive for short-sighted management solutions (cough…GM). I can easily imagine several circumstances where a large company, with huge overhead and capital requirements, could benefit long-term from an intenional foray into the red. Making a habit of that practice would obviously not be a good thing though.

Have you ever met “Maximum” Bob? That guy was nuts!