Jesus spoke up and answered his thoughts. "Simon," he said to the Pharisee, "I have something to say to you." "All right, Teacher," Simon replied, "go ahead."
Then Jesus told him this story:
"A man loaned money to two people-- $5,000 to one and $500 to the other. But neither of them could pay him back, so he kindly forgave them both, letting them keep the money! Which do you suppose loved him most after that?" "I suppose the one who had owed him the most," Simon answered. "Correct," Jesus agreed.
Then he turned to the woman and said to Simon, "Look! See this woman kneeling here! When I entered your home, you didn't bother to offer me water to wash the dust from my feet, but she has washed them with her tears and wiped them with her hair.
You refused me the customary kiss of greeting, but she has kissed my feet again and again from the time I first came in. You neglected the usual courtesy of olive oil to anoint my head, but she has covered my feet with rare perfume. Therefore her sins--and they are many--are forgiven, for she loved me much; but one who is forgiven little, shows little love." And he said to her, "Your sins are forgiven." Then the men at the table said to themselves, "Who does this man think he is, going around forgiving sins?"
And Jesus said to the woman, "Your faith has saved you; go in peace." Luke 7:40-50

Jesus used this opportunity to teach of love and forgiveness. Jesus publicly forgave her sins. The story provides the moral of the parable.
The one who receives forgiveness of little, loves little, but the one who receives forgiveness for much, loves much. Jesus had pronounced her sins were forgiven, and the woman (who was not Mary of Magdalene nor Mary of Bethany who also used expensive perfume on Jesus' feet) was very grateful and full of love toward Jesus. She had received Him as her Lord and Saviour. Because of Christ, all sin can be forgiven and believers are freed from the burden of debt, and gratitude can be shown by a life of holiness and in service bring others to Christ who alone can save them.

Jesus explained to him that he, Simon as a host himself, did not provide water for His guest's feet, which was lacking in social courtesy, a common custom that went back as far as Abraham's day, and now he had His feet washed in a much better way, with tears and expensive perfume, out of love, for the forgiveness of many sins, that was given her through faith in who He was. The woman had a new life in Christ with her past behind her.
The creditor represents Christ Himself, the one in debt the most represents the woman, the other debtor personifies the self-righteous religious person, satisfied with his own goodness.

The creditor out of his own graciousness wiped free the debtor's payment. He freed them from the debt to Him. Both were in debt to God. The contrast between the self-righteous Pharisee and the forgiven harlot is vivid. Simon needed to recognise the depth and extent of his own sin and the greatness of God's mercy and love, as the woman did. Both had nothing by which they could clear themselves of the debt, as is the same of all the human race. The woman believed who Christ was. God looks at the heart. No one should judge after the sight of their eyes, for all are guilty sinners, some more, some less. All are bankrupt in the sight of God without Christ, all have sinned.

No sin is too great to be forgiven. Only God can forgive sins to make sinners right in His sight. God wants to forgive and many people like Simon the Pharisee, judge without using God's standards and have a judgmental attitude by magnifying the sins of others while excusing their own. It is right, however to judge sin when it is confronted, but no person can judge another's heart for justice. The sinner themselves have to acknowledge their sin and ask God's forgiveness.
All need the forgiving grace of God The Father, through Christ.