A link budget is accounting of all of the gains and losses from the transmitter, through the medium (free space, cable, waveguide, fiber, etc.) to the receiver in a telecommunication system. It accounts for the attenuation of the transmitted signal due to propagation, as well as the antenna gains, feedline and miscellaneous losses. Randomly varying channel gains such as fading are taken into account by adding some margin depending on the anticipated severity of its effects. The amount of margin required can be reduced by the use of mitigating techniques such as antenna diversity or frequency hopping.
A simple link budget equation looks like this:
Note that decibels are logarithmic measurements, so adding decibels is equivalent to multiplying the actual numeric ratios.
For a line-of-sight radio system, the primary source of loss is the decrease of the signal power due to uniform propagation, proportional to the inverse square of the distance (geometric spreading).
Often link budget equations can become messy and complex, so there have evolved some standard practices to simplify the link budget equation
In practical situations (Deep Space Telecommunications, Weak signal DXing etc. ...) other sources of signal loss must also be accounted for
If the estimated received power is sufficiently large (typically relative to the receiver sensitivity), which may be dependent on the communications protocol in use, the link will be useful for sending data. The amount by which the received power exceeds receiver sensitivity is called the link margin.
A link budget equation including all these effects, expressed logarithmically, might look like this:
where:
The loss due to propagation between the transmitting and receiving antennas, often called the path loss, can be written in dimensionless form by normalizing the distance to the wavelength:
When substituted into the link budget equation above, the result is the logarithmic form of the Friis transmission equation.