In the field of finance and accounting, ratio analyses have become the preliminary concentration prior to progressing to any advanced discussion. The same is true for numerous studies on quality of employees. It may be relatively safe to say that the true connections between the two, if any, may have received minimal attention. Based on the perspective of the knowledge-based theory of the firm, this paper attempts to study the connection between the quality of employees and ratio analysis. Employees are seen as an increasingly important factor in handling the future market uncertainties and minimizing the organizations' potential downturns. In preliminary literature, qualitative studies have been undertaken concerning the theory of the firm, including its development, as well as its implications to supply chain management, consumer behavior and customer satisfaction. For the purpose of the study, the quality of employees is measured only on basis of employees' skills and abilities, and the ratio analyses are also limited to growth ratios (sales growth, net profit growth, and cost reduction). It is expected that the higher the quality of employees, the higher the growth ratios of any given firm. A cluster sampling method is used in this study to note the characteristics of small enterprises in certain locations. Aside from the qualitative analyses, which are based on interviews and field observations, a combination of statistical software packages are used as tools toward performing quantitative analysis. Research is conducted by gathering data from primary and secondary sources in service industries in Jakarta and Bandung. As stated, it is expected that such studies would reveal the significance of connections between quality of employees and ratio analysis. It is expected that such issues are mostly true for small/micro businesses.

Management of human resources has become the central focus in management practices for years. The reason is relatively simple as the firm's human resources play a fundamental role in ensuring firm's daily operational activities, and thus, firm's viability in years to come. Using the perspective on the knowledge-based theory of the firm (Anantadjaya, 2009a, and Anantadjaya et al., 2010), this paper attempts to perform ratio analysis on the quality of human resources inside organizations.

Human resources represent the 'breath and blood' of organizations. Many firms have seen substantial growth given the quality of human resources. Ironically, it is also undeniable that large corporations have seen substantial slide, including the required step on filing for bankruptcy, regardless of the superb quality of human resources. The recent global crises have certainly shown such drastic slides. Figure 1 suggests that human resources represent human capital for firms that can contribute onto the overall organizational performance, and value creation. This is an evidence that the pool of human resources is seen as an increasingly important resource1 in grasping market opportunities, combating uncertainties and minimizing firm's shortcomings.

Accounting Research and Audit Practices, Economic Performance, Millennium Development Goals, Corporate Sustainability, Economic Transactions, Social Management, Environmental Accounting, Corporate Houses, Environmental Management System, Community Development, Waste Management, German Firms, United Nations Environment Program.