Woolworths chief Brad Banducci couldn’t give senators his company’s ‘return on equity’. What exactly is this figure, and what can it tell us about a company’s profit?

Both are measures of profitability, but the disparity between return on investment and return on equity grows larger as a company relies more heavily on borrowing, writes Associate Professor Sean Pinder for The Conversation.

Woolworths chief Brad Banducci couldn’t give senators his company’s ‘return on equity’. What exactly is this figure, and what can it tell us about a company’s profit?