What is a link budget?

A link budget is a comprehensive accounting of all the gains and losses in a communications system, tracking the signal from the transmitter all the way to the receiver. Just like a financial budget, it involves a starting balance, income, and expenses. You start with your initial amount (transmitter output power), add your positive factors (transmit and receive antenna gains), and subtract your negative factors (cable losses, connector losses, and free space path loss). The final calculated result is the signal strength that actually arrives at the receiver. The distractor that only mentions 'the sum of antenna gains minus system losses' is incorrect because it forgets the most crucial starting point: the initial transmit power.