It's a simple mathematical conversion based on the transmissions gear ratios.

As others have said HP = torque and RPM. If you have a transmission with a 4:1 gear ratio, it's going to reduce the RPMs by a factor 4 and increase the torque by a factor of 4.

If you have a 20 HP engine running at 3600 RPM, it puts out ~29 ft lbs of torque.

If I run that through a 28:1 gear ratio transmission (in perfect conditions!) then I divide the 3600 engine RPM by 28 and get 124 RPM on the output (i.e. the axles).

In a perfect transmission you don't lose anything so 20 HP going in has to equal 20 HP going out. If I divide RPM by 28 basic algebra says you multiply torque to balance things out. So I multiply engine torque of 29 ft lbs by 28 and get 812 ft lbs of torque at the output. 124 RPM and 812 ft lbs still gives you ~20 HP.

Ok, so we know if you have 3600 RPM going in and a 28:1 gear ratio you get 124 RPM coming out.

Torq Tuff's spec sheet lists the K46 with a max output torque of 171 ft lbs. So 124 RPM and 171 ft. lbs = ~4.2 HP. (I cheated on the math and used

an on-line calculator!) So anything more than 4.2 HP going in is wasted.