A link budget is an accounting of all of the power gains and losses that a communication signal experiences in a telecommunication system; from a transmitter, through a communication medium such as radio waves, cables, waveguides, or optical fibers, to the receiver. It is an equation giving the received power from the transmitter power, after the attenuation of the transmitted signal due to propagation, as well as the antenna gains and feedline and other losses, and amplification of the signal in the receiver or any repeaters it passes through. A link budget is a design aid, calculated during the design of a communication system to determine the received power, to ensure that the information is received intelligibly with an adequate signal-to-noise ratio. In most real world systems the losses must be estimated to some degree, and may vary. A link margin is therefore specified as a safety margin between the received power and minimum power required by the receiver to acurately detect the signal. The link margin is chosen based on the anticipated severity of a communications drop out and can be reduced by the use of mitigating techniques such as antenna diversity or multiple-input and multiple-output (MIMO).
A simple link budget equation looks like this:
Power levels are expressed in (dBm), Power gains and losses are expressed in decibels (dB), which is a logarithmic measurement, so adding decibels is equivalent to multiplying the actual power ratios.